Which factors influence the decisions of renewable energy investors? Empirical evidence from OECD and BRICS countries

Abstract

Abstract The importance of employing Renewable Energy (RE) sources has recently expanded significantly, particularly in light of growing worries about climate change issues and rising fossil-fuel prices constituting a substantial threat to the country's economies. However, there has been very little examination of RE deployment from the perspective of investors to date. For this reason, determining the most successful investor behavior in the deployment of RE is critical. In terms of the establishment of a conceptual framework, the current paper provides a systematic and quantitative measure to compare the implications of variables in OECD and BRICS countries. This study employs a variety of panel regression procedures such as panel unit test, fixed and random effects model, generalized method of moments (GMM), and robustness check to investigate the determinants of RE investment in OECD and BRICS nations through a panel data study from 2000 to 2020. Economic growth, RE policy, and R&D spending all have a statistically significant and positive association with RE capacity, according to the GMM data. RE investment, on the other hand, is inversely related to energy, electricity use, and carbon emissions (CO2). Strong regulatory (policy, R&D) perception is significant in RE investment.

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