Distributional Effects of German Government Subsidies for Solar Power

Financial incentives boost individual-level support for sustainable energy solutions and specifically boost the installation of photovoltaics across advanced industrialized democracies as different as the United States and Sweden. However, many countries' public policies to accelerate the transition to cleaner energy have had economically significant distributional consequences, often favoring upper middle class voters over lower-income voters. Higher income citizens' unequal opportunities for benefitting from government incentive schemes have often been reinforced by simultaneously disproportionately leaving lower-income citizens to pay the fixed costs of traditional electricity generating systems, raising the cost of electricity for those citizens and making the energy transition incentive schemes overall upwardly redistributive. We argue that such upwardly redistributive public policies are not just normatively problematic but also unintentionally undermine political support for the green energy transition, which these policies are supposed to strengthen. We examine the political consequences of such distributional aspects of the energy transition based on micro-level data from the energy transition in Germany. Authors: Tim BÜTHE, Munich School of Politics and Public Policy at the Technical University of Munich (TUM) and Duke University Aylin DINGIL, Bioeconomics, TUM Campus Strabing and TransforM Research Cluster (TUM) Thomas HAMACHER, School of Engineering and Design, TUM [The first two authors will attend and co-present]