Market Structure and Technology Adoption in Renewable Energy
We study the effect of market structure on technology adoption in the U.S. solar and wind power industries. We compare adoption across two market types: restructured markets, which are designed to promote competition, and traditional markets, which are dominated by regulated monopolists. Solar projects in restructured markets are 21 percent less likely to adopt frontier technology, while the effect for wind projects is negative but statistically insignificant. We provide evidence this negative relationship between competition and adoption is explained by differences in financing costs across the two market types.