Solar energy-economic growth nexus in top 10 countries with the highest installed capacity

ABSTRACT

This paper investigates the relationship between solar energy production and economic growth for top 10 countries with the highest installed solar energy production capacity as of 2017 (China, the USA, Japan, Germany, Italy, India, the UK, France, Australia, and Spain, respectively) using data over the period 1999–2015. For this purpose, the paper employs panel cointegration and causality methods that are robust to cross-sectional dependence. The findings imply that the coefficient of solar energy is insignificant in the empirical model and that there is no causality between solar energy and GDP, indicating the neutrality hypothesis prevails for solar energy. Theoretical and practical implications are also discussed.

KEYWORDS:

• Renewable energy
• solar energy
• economic growth
• cross-sectional dependence
• panel cointegration
• panel causality

Acknowledgments

The authors would like to thank the anonymous reviewers for their suggestions.

Disclosure statement

The authors declare that they have no conflict of interest.

Notes

¹ In the world, the share of fossil sources in total energy consumption was 80.4% in 2015 (World Bank 2020).