debt leases taxes and the endogeneity of corporate tax status we provide evidence that corporate tax status is endogenous to financing decisions which induces a spurious relation between measures of financial policy and many commonly used tax proxies using a forward looking estimate of before financing corporate marginal tax rates we document a negative relation between operating leases and tax rates and a positive relation between debt levels and tax rates this is the first unambiguous evidence supporting the hypothesis that low tax rate firms lease more and have lower debt levels than high tax rate firms many theories of capital structure imply that all else equal the incentive to use debt financing increases with a firm s marginal tax rate due to the tax deductibility of interest expense e g modigliani and miller 1963 deangelo and masulis 1980 conversely leasing models generally predict that firms with low marginal tax rates employ relatively more leases than do firms with high marginal tax rates the logic behind the leasinlg prediction is that leases allow for the transfer of tax shields from firms that cannot fully utilize the associated tax deduction lessees to firms that can lessors e g myers dill and bautista 1976 smith and wakeman 1985 ross westerfield and jaffe 1996 despite these straightforward predictions empirically testing for tax effects is difficult because a spurious relation exists between the financing decision and many commonly used tax proxies specifically both interest expense and lease payments are tax deductible thus a firm that finances its operations with debt or leases reduces its taxable income potentially lowering its expected marginal tax rate if not properly addressed this endogeneity of the tax rate can bias an experiment in favor of finding a negative

individual and collective socio psychological patterns of photovoltaic investment under diverging policy regimes of austria and italy abstract photovoltaic policies show the primary effect of encouraging photovoltaic investments but also secondary effects of crowding in out individuals with specific socio psychological patterns to enhance our understanding of such crowding effects we investigated two comparative study cases with contrasting state support for photovoltaic investments high financial support in the province of bolzano south tyrol italy versus lower financial support in the province of styria austria we surveyed individual and collective investors and as a control group households who had not invested in photovoltaics at the time of data collection we first compared crowding effects of diverging pv policies and afterwards individual and collective socio psychological patterns to grasp their role for photovoltaic adoption in general protecting the environment was found to be the strongest driver for photovoltaic investments generous state support in italy widened demographics crowded in economic considerations and persons with an anthropocentric relationship towards nature however italy s high incentivized photovoltaic policy crowded out the motivations for collective energy projects and could not sufficiently encourage a sustainable diffusion of photovoltaics as investments collapsed once state funding was stopped

making the case for grid connected photovoltaics in brazil abstract in the developed world grid connected photovoltaics pvs are the fastest growing segment of the energy market from 1999 to 2009 this industry had a 42 compound annual growth rate from 2009 to 2013 it is expected to grow to 45 and in 2013 the achievement of grid parity when the cost of solar electricity becomes competitive with conventional retail including taxes and charges grid supplied electricity is expected in many places worldwide grid connected pv is usually perceived as an energy technology for developed countries whereas isolated stand alone pv is considered as more suited for applications in developing nations where so many individuals still lack access to electricity this rationale is based on the still high costs of pv when compared with conventional electricity we make the case for grid connected pv generation in brazil showing that with the declining costs of pv and the rising prices of conventional electricity urban populations in brazil will also enjoy grid parity in the present decade we argue that governments in developing nations should act promptly and establish the mandates and necessary conditions for their energy industry to accumulate experience in grid connected pv and make the most of this benign technology in the near future

performance evaluation of renewable energy support policies applied on flanders tradable certificates system abstract the article is composed as a diptych first a general framework of criteria to evaluate the performance of renewable energy support systems is elaborated it is built around the main criteria effectiveness efficiency and equity all three are multi layered and specifying the contents of the various layers is case dependent second the framework is applied on detailed data about the flemish tradable certificates support system several salient conclusions confirm observations from research in other countries causing growing awareness first most crucial is a careful and detailed qualification of renewable energy sources and technologies without even effectiveness is not reliably measurable second nearby targets of renewable energy output must follow from a clearly designed transition trajectory towards a sustainable electricity sector such transition is intertwined with an industrial technological policy for bringing the necessary technologies to development and maturity third if the above two prerequisites are overridden certificates systems abound of excess profits predominantly reaped by incumbent power companies being not the best agents of real change to a sustainable energy future

financial incentives to mobilise local citizens as investors in low carbon technologies a systematic literature review abstract mobilising greater levels of private finance through local citizen investment in low carbon technologies can help bridge the capital shortfall to meeting climate objectives while also building societal support for the low carbon transition within this context we undertake a systematic review of literature assessing the impact of technology specific economic and financial incentives promoting greater levels of investment in low carbon technologies from local citizen investors both individuals and community groups we focus in particular on the impact of feed in tariffs compared to quota schemes grants tax incentives and soft loans the analysis suggests that local citizen investors do not necessarily act in an economically rational manner in response to these incentives it underscores the importance of understanding the preferences of target demographics the local context as well as the characteristics of the technologies in question and suggests interventions should be considered as part of wider policy packages while identifying challenges to be overcome through instrument design we find that feed in tariffs grants and tax incentives can be successful in mobilising greater levels of investment from local citizen investors but that soft loans tend to be less effective as a stand alone instrument the review identifies areas meriting further exploration in this emerging field of research

economic analysis of different supporting policies for the production of electrical energy by solar photovoltaics in western european union countries abstract within various renewable energy technologies photovoltaics pv today attracts considerable attention due to its potential to contribute a major share of renewable energy in the future however pv market development is undoubtedly dependent on the political support of any given country in this paper after a brief analysis of national support policies in pv technology in western european union eu countries the authors perform an economic analysis of the main support mechanisms as implemented in the same countries based on the calculation of the cash flow the net present value npv and the internal rate of return irr indices the analysis shows that in some situations support policies can be inconvenient for the owner of the pv based generation system and that in many cases the differences between the implementation of the same support policy in different countries can give rise to significantly different results the analysis carried out in this work could help to assess the impact of pv energy policies in different western european member states renewable energy companies to identify potential pv markets and investigate the policy landscape across western eu countries

slovak electricity market and the price merit order effect of photovoltaics abstract this paper analyses slovak electricity market with a focus on photovoltaic energy it evaluates the impact of the solar electricity penetration into electricity mix on spot prices seeks evidence of the merit order effect in the slovak electricity market and quantifies it based on hourly data the multivariate regression analysis covers the period 2011 2016 the rather small merit order effect estimated by an ols time series model leads to the small decrease of slovak electricity wholesale prices this spot price reduction attributable to the photovoltaics does not outweigh the costs of the support scheme borne by end users what implies a consumer loss

solar feed in tariffs examining fair and reasonable retail rates using cost avoidance estimates abstract growing solar photovoltaic pv electricity systems in geographically diverse regions presents a complex policy problem for governments during 2013 16 the queensland government in australia examined establishing a fair and reasonable retail feed in tariff fit policy noting it regulates state retail electricity consumption prices a combined cost avoidance and stakeholder analysis was applied to show that determination of a fair and reasonable fit for all stakeholders while aspirational is difficult to achieve typically agreement on a fair tariff rate will depend on stakeholders relative position in energy supply chains service providers retailers suppliers customers advocates and interpretations of fairness that can be shaped by competition in the supply area also increases in financial benefits to pv customers might be considered unreasonable by non pv customers and retailers that experience increases in electricity prices and operating costs importantly the application of a retail fit in regional and isolated areas requires careful energy policy design taking account of network losses remote and isolated customer metering cost effective network control technologies and diesel generator operating limits the study also observed that shifting funding of fit schemes from electricity distributors to competitive retailers will likely have negative consequences for retail fit offerings and pv customer servicing

financial analysis on the proposed renewable heat incentive for residential houses in the united kingdom a case study on the solar thermal system abstract this short communication paper focuses on the renewable heat incentive rhi scheme in the united kingdom uk and in particular on its implication on domestic installations of solar thermal systems stss first a short review on the sts in the uk is provided then a detailed description of the rhi is discussed a financial analysis is presented afterwards analysing the impact of the rhi scheme on the applicants in terms of the net present value and the internal rate of return from the financial analysis it has been found that the rhi scheme for domestic installations is only attractive if a longer period of rhi payment i e 17 years or a higher rhi rate i e 0 32 per kw h is implemented the current proposal from the uk government is not financially viable and as a result it may hinder the penetration of domestic solar thermal systems in the residential sector in the uk

analysis of the effectiveness of national renewable energy policies a case of photovoltaic policies abstract although fossil fuels are the main sources of power generation they are losing their advantages because of their limitations and environmental and economic concerns as an alternative the development of renewable energy technologies is one of the important strategies therefore governments have been encouraging the deployment of renewable energy resources however there are gaps between achievements and targets as most of the national renewable energy development policies are formulated in the entire country equally the outputs and achievements are different depending on the geographical characteristics social and economic capabilities of the regions the purpose of the present study is the analysis and the evaluation of the effectiveness of the equal national renewable energy policy in the different regions of a country this research focuses on the idea that whether the codification of energy policies according to the local circumstances of each region can result in a greater efficiency of such policies an innovative framework is presented to categorize the government policies based on the geographical technical and socio economic indicators to examine the presented framework it is implemented as a case study

improving australia s renewable energy project policy and planning a multiple stakeholder analysis abstract renewable energy re is part of australia s and the world s energy supply matrix with over a 100 billion spent annually on re projects since 2007 businesses seeking to invest in re projects particularly in the wind and solar energy sectors may face an onerous collection of planning approvals and permitting processes that impede investment and implementation in this study we draw on international and domestic stakeholder inputs to a governmental inquiry in australia to show how re projects might be approved in shortened timeframes with reduced associated costs the process mapping and stakeholder analysis demonstrates that re supply projects can benefit from standardized approval processes and documentation a 360 deep engagement with stakeholders and expanded electricity grid access in resource areas augmented through supportive public policy and planning frameworks in addition stakeholder objections to project approval and implementation streamlining were used to contrast the efficacy of the proposed changes in policy

environmental and economic analysis of building integrated photovoltaic systems in italian regions abstract solar energy is a form of renewable energy that can be used to combat climate change through an environmentally accepted energy supply policy with support from both private and public consumers there are numerous factors contributing to the definition of the economic and environmental performance of solar energy investments such as average annual irradiation consumers consumption feed in tariff incentive system energy portfolio emissions produced by the photovoltaic system rated power of the individual modules disposable income of the investor availability of surface for the installation of the photovoltaic panels and mission that characterise the project environmental maximisation economic maximisation or self sufficiency of the system during the first year given the particular geographical position of italy the economic profitability and environmental impact of such system were estimated first on the provincial scale and then on the regional scale to delineate the general characteristics that are not caused by a single scenario the indicators used include the following net present value npv internal rate of return irr discounted payback period dpbp discounted aggregate cost benefit ratio bcr and reduction of emissions of carbon dioxide ercd the ultimate objective of the paper is to define the number of photovoltaic pv systems necessary to reach the target of renewable energy production in the above settings a general scenario appropriate to achieve this goal as well as implementing the total wealth generated by this framework and the reduction of co2 emissions resulting from the implementation of that plan will be examined the indicators used are total net present value per capita and reduction of carbon dioxide emissions per capita

feed in tariffs combined with capital subsidies for promoting the adoption of residential photovoltaic systems abstract both feed in tariffs fits and capital subsidies have been widely employed to promote the adoption of renewable energy technologies this study sheds light on the combined use of fits and capital subsidies the purpose of the study is to clarify their optimal combinations in order to encourage households to adopt photovoltaic pv systems the study develops a microeconomic model embodying the idea of two part tariffs the most important findings concern the combination that maximizes social welfare if fits are applied to the total pv electricity generated they should be set at the avoided cost per unit of pv electricity and capital subsidies should be used to control the number of adopters whereas if fits are applied to only surplus pv electricity the previous principle is distorted however a numerical example suggests that the distortion has little effect on the maximized social welfare and thus it makes little difference whether fits are applied to all pv electricity or just the surplus pv electricity the findings may also be applied to the adoption of wind power generation systems and to adoption by businesses

the doping effect of italian feed in tariffs on the pv market abstract in less than six years italy has become one of the leading markets for pv power plants and one of the countries in the world with the largest number of installations and installed peak power such a quick and large growth is due to a series of feed in tariff schemes that have been uncapped until 2012 as a matter of fact any size or any number of pv power plants could be installed during a period of three years since the feed in tariffs are not paid by national taxes but are charged on the electricity bills italian energy users are now due to pay each year a surcharge of 9 billion euros on their energy bills this paper aims at discussing this development by highlighting the benefits but also some significant drawbacks that the application of uncontrolled feed in tariffs has produced

integration of renewable energy sources in southeast europe a review of incentive mechanisms and feasibility of investments abstract incentivizing development and deployment of renewable energy sources res but also other low carbon technologies lct has been a successful way of promoting new technologies by creating a feasible investment case and making them competitive with traditional energy sources although different incentive mechanisms exist feed in tariffs have shown to be the best model for accelerating lct development guaranteeing producers preferential prices for the produced electricity over a period of time and enabling them access to the power network to sell inject produced electricity due to these benefits feed in tariff models are the most common model for stimulating res integration in southeast europe the paper reviews the current state of preferential tariffs for res in countries of southeast europe while some countries already have significant installed res capacity others are still in the planning stage the review shows that the amount of installed capacity of a specific technology has a strong impact on the support for the future projects for same technology this comprehensive review of legislative development supporting res as well as technologies preferred in different countries of the region is supported with feasibility assessment of investing in res using the example of two different technology projects wind and photovoltaic analysing the impact of the current tariffs on the return on investment for each country of the region

revisiting the techno economic analysis process for building mounted grid connected solar photovoltaic systems part two application part one in this two part paper identified monte carlo analysis as an improved approach over traditional deterministic techno economic methods for solar pv prosumers in deregulated markets in this

analyst coverage and corporate tax aggressiveness abstract we examine the impact of analyst coverage on corporate tax aggressiveness to address endogeneity concerns we perform a difference in differences analysis using a setting which causes exogenous decreases in analyst coverage our tests identify a negative causal effect of analyst coverage on tax aggressiveness suggesting that higher analyst coverage constrains corporate tax aggressiveness further cross sectional variation tests find that this constraining effect on tax aggressiveness is more pronounced in firms with lower investor recognition and firms with more opaque information environments our results are consistent with the notion that higher analyst coverage increases the visibility of aggressive tax planning behavior as well as heightens analysts demand for more transparent information which in turn reduces tax aggressiveness

an assessment of the greek incentives scheme for photovoltaics abstract after two years of elaboration a new legislation was enacted in 2006 in greece providing an appealing feed in tariff fit scheme for photovoltaics pvs the response of the market was immediate with more than 7947 licenses having been submitted in less than 2 years time the effectiveness however of an incentives scheme cannot be judged solely by the response of prospective investors aim of this paper is to present and discuss a quantitative assessment of this newly introduced fit law in greece with respect to its attractiveness to investors its effectiveness towards launching a new market its cost efficiency and its ability to lift non economic barriers that led to significant delays in the diffusion of res over the last 10 years

renegotiation proof implementation and time preferences this paper explores how the requirement that the implementation of contracts be renegotiation proof affects the set of contracts that can be implemented in a seller buyer scenario in which the information regarding the agents valuations is nonverifiable this paper explicitly adds a time dimension to an implementa tion problem and introduces a natural criterion of renegotiation proofness for the case of time consuming renegotiation the main insight gained is that the addition of the time dimension enlarges significantly the set of contracts that can be implemented in a renegotiation proof manner jel c70 d23 this paper explores how the requirement that the implementation of contracts be renegotiation proof affects the set of con tracts that can be implemented in a seller buyer scenario in which the informa tion regarding the agents valuations is non verifiable the paper s main contributions are that first it explicitly adds a time di mension to an implementation problem and second it introduces a natural criterion of renegotiation proofness for the case of time consuming renegotiation for concreteness the discussion will be conducted in the context of the following example there are two agents a seller and a buyer who sign a contract for the sale of one unit in the future their valuations for the unit denoted by s and b respectively are not known when they sign the contract they become known to both parties after the contract is signed and before it is imple mented thus when it comes to implement ing the contract the parties information is complete but it is assumed to be nonverifi able i e not observable to third parties such as a court 1 when they sign the con tract the parties want to specify for any possible realization of the valuations s b whether or not there will be trade and the price p s b at which it will take place the contract describes the procedure that will be followed after the valuations are real ized the purpose of this procedure is to make sure that the original intentions of the parties are indeed carried out the idea is that the steps laid out in the contract are independent of s b and hence are en forceable by a third party or by a social convention in game theoretic terms a contract specifies a game form that imple ments the function p in the sense that for all s and b p s b is the resulting game s unique subgame perfect equilibrium out come in the context of this scenario we shall investigate the set of price functions p s b that can be so implemented by a contract and examine how this set is affected by the requirement that the contract be renegotia

financing instruments and channels for the increasing production and consumption of renewable energy lithuanian case the growing demand for energy commitments taken to reduce greenhouse gas emissions fossil fuel depletion and other issues enforced to accept the decision to analyze financing issues of renewable energy sector worldwide this paper addresses two financing issues financing channels and instruments and their impact on energy cost the analysis revealed that the governmental support in the form of tax reductions and subsidies and international funds are important renewable energy sector financing channels in developing countries availability of private resources increases under the established public private partnership agreements economically advanced countries use a greater variety of financing channels and instruments because of high growth of renewable energy sector some new financing channels are available the experience of lithuania revealed that governmental policy encourages investment into the renewable energy sector banks found attractive renewable energy technologies after feed in tariffs increased eu structural funds and tax incentives are available especially in subsidizing combined cycle electricity and heat generation innovative financing instruments provided under the jessica and jeremie initiatives as well as investment subsidies are favorable to develop solar energy sector in lithuania seeking to expedite solar sector development in lithuania it is essential to review a feed in tariff which currently is too low and impedes implementation of solar pv technologies solar collectors could compete in the district heating sector even without a support

consumer loss in czech photovoltaic power plants in 2010 2011 this paper provides a financial survey of a small sample of czech photovoltaic pv plants to evaluate the extent of market losses we calculate the shadow market price of solar electricity from the profit and loss accounts of the pv plants and the shadow market price we estimate the total economic loss generated by pv electricity sector in the czech republic the presented microeconomic approach has two main advantages firstly we work with real observed data which offsets the drawback of a limited sample secondly the profit accounting calculation enables sensitivity analysis with respect to key variables of the plants we show that money invested in pv plants would generate an annual loss of 8 given the estimated solar assets of czk 165 6 billion eur 6 6 billion as of december 2011 this translates in at least czk 12 6 billion lost in the czech solar sector in 2012 about 43 of this loss is due to high technology costs and corresponds to pure dead weight loss while the remaining 57 constitute the redistributive profit component of subsidies finally we calculate that unless electricity prices increase or technology costs decrease approximately sevenfold pv plants will remain loss making

comparative economic analysis of supporting policies for residential solar pv in the united states solar renewable energy credit srec potential numerous studies and market reports suggest that the solar photovoltaic markets rely heavily if not entirely upon governmental support policies at present unlike in other countries where these policies are enacted at a national level the 50 states in the us pursue different policies in an attempt to foster the growth of renewable energy and specifically solar photovoltaics this paper provides an economic and financial analysis of the us federal and state level policies in states with solar targeted policies that have solar renewable energy credits srec markets after putting a value on srecs this study further compares solar carve outs with other incentives including the federal tax credit net metering and state personal tax credits our findings show that srec markets can certainly be strong with new jersey delaware and massachusetts having the most potential despite their strong potential as effective renewable policies the lack of a guaranteed minimum and the uncertainty attached are major drawbacks of srec markets however the leveraging of this high value offers hope that the policies will indeed stimulate residential solar photovoltaic markets

the solar photovoltaic feed in tariff scheme in new south wales australia solar photovoltaic pv electricity systems are part of australia s energy supply matrix in the case of new south wales nsw the state government has had to deal with a complex policy problem in order to play its role in the federal small scale renewable energy scheme the nsw government initiated the 7 year solar bonus scheme in 2010 however in attempting to maximise community investment in small scale solar pv systems it relied on faulty financial modelling that applied a generous feed in tariff fit and underestimated the level of investor participation and installed capacity consequently the scheme has resulted in very high public costs that will require policy changes that bring investors and energy retailers into conflict and unpopular electricity retail price adjustments this paper uses a structured case and stakeholder analysis to critically analyse the fit policy while also highlighting important lessons for policymakers engaging in fit design

corporate tax aggression and debt we provide a tradeoff model of the capital structure that allows leverage to be a function of a firm s choice of tax aggressiveness the model s testable implications are supported empirically debt use is inversely related to corporate tax aggression for most firms and the relation is economically important this substitution effect is especially evident for firms exhibiting high tax shelter prediction scores the effect attenuates for benign forms of tax avoidance and during the recent credit crisis period for the most profitable firms debt and tax aggression are complements our results extend the empirical findings of graham and tucker 2006

economic consequences of increasing the conformity in accounting for uncertain tax benefits abstract commentary during the development of fasb interpretation no 48 suggests the interpretation could be costly for firms because new disclosure requirements could be used by the irs to more effectively challenge uncertain tax positions stock returns around fin 48 pronouncements suggest investors were not concerned about an increase in tax costs and investors responded favorably to initial disclosures required under fin 48 however we document a significant negative market reaction to subsequent news of a senate inquiry into these disclosures consistent with investors revising their beliefs over the potential for additional tax costs

combining feed in tariffs and net metering schemes to balance development in adoption of photovoltaic energy comparative economic assessment and policy implications for european countries abstract in the last fifteen years europe has been involved in the major development of photovoltaic pv solar energy the kyoto protocol requirements and the european union eu directives to promote the use of renewable energy sources res together with environmental policies introduced for the development and use of alternative energies have generated a large number of market opportunities for this sector differences in the application of energy policies have caused significant imbalances in electricity systems and distortion of electricity prices the main concern of governments is to define the support schemes to be used and how to combine them in the most profitable manner the aim of this paper is to provide a comparative cost effectiveness assessment using feed in tariffs fit and net metering nm schemes in some representative eu countries the authors have developed an economic model to evaluate the profitability of pv projects combining these support schemes results show not only the circumstances under which solar energy is economically profitable but also the kind of pv systems locations minimum levels of tariff prices and specific combination of support schemes that should be promoted