Solar Renewable Energy Credit Price Volatility and Investment Returns: Have Policies Stranded Capital Investment?

Commonwealth ◽  
2017 ◽  
Vol 19 (1) ◽  
Author(s):  
Somayeh Youssefi ◽  
Patrick L. Gurian
Keyword(s):  
Solar Energy ◽  
Capital Investment ◽  
Supply And Demand ◽  
Price Volatility ◽  
The United States ◽  
Investment Model ◽  
Capital Investments ◽  
Demand Model ◽  
Market Prices ◽  
Investment Returns

Pennsylvania is one of a number of U.S. states that provide incentives for the generation of electricity by solar energy through Solar Renewal Energy Credits (SRECs). This article develops a return on investment model for solar energy generation in the PJM (mid-­Atlantic) region of the United States. Model results indicate that SREC values of roughly $150 are needed for residential scale systems to break even over a 25-­year project period at 3% interest. Market prices for SRECs in Pennsylvania have been well below this range from late 2011 through the first half of 2016, indicating that previous capital investments in solar generation have been stranded as a result of steep declines in the value of SRECs. A simple conceptual supply and demand model is developed to explain the sharp decline in market prices for SRECs. Also discussed is a possible policy remedy that would add unsold SRECs in a given year to the SREC quota for the subsequent year.

scholarly journals The Skinny on a Fat Tax: Obesity and Microeconomics

2004 ◽  
Vol 11 (1) ◽  
pp. 41
Author(s):  
Lisa M. Southworth
Keyword(s):  
Supply And Demand ◽  
Cost Benefit ◽  
The United States ◽  
Microeconomic Theory ◽  
Consumer Decision Making ◽  
Demand Model ◽  
Major Health Problem ◽  
Consumption Decisions ◽  
Pros And Cons ◽  
Supply And Demand Model

The growing problem of obesity in the U.S. has prompted calls for government action, including the imposition of a "fat tax." The author uses microeconomic theory and a cost-benefit framework to explore the pros and cons of a fat tax. She applies theories of rational and irrational consumer decision-making to obesity-related consumption decisions and presents a simple supply and demand model to suggest the likely consequences of a fat tax. The author concludes that, before implementing a fat tax, additional research is needed to determine if a fat tax is merely the latest fad or a significant policy initiative that will make real contributions to correcting a major health problem in the United States.

scholarly journals Conditions Necessary for Private Investment in the Ethanol Industry

2009 ◽  
Vol 41 (2) ◽  
pp. 455-464 ◽  
Author(s):  
Philip Kenkel ◽  
Rodney B. Holcomb
Keyword(s):  
Cellulosic Ethanol ◽  
Capital Investment ◽  
Production Capacity ◽  
Private Investment ◽  
The United States ◽  
Agricultural Economics ◽  
Capital Investments ◽  
Feedstock Production ◽  
Financial Issues ◽  
Short Timeframe

While agricultural economics literature has become rife with the economics of ethanol production and cellulosic ethanol feedstock production, little has been written about capital investment necessary for the magnitude of industry development mandated by the Energy Security and Independence Act of 2007. Financing the development of the ethanol industry to meet the 36 billion gallon production capacity set for 2022 (with 16 billion gallons from cellulosic ethanol) will require capital investments exceeding $100 billion for production facilities, plus extensive investment in feedstock establishment and transportation/handling infrastructure. Federal support associated with political mandates does not address all of the financial issues related with the development of the industry in such a relatively short timeframe. This article addresses the challenges associated with and the conditions necessary for achieving the private investment needed to expand the ethanol industry in the United States.

scholarly journals Distortionary Impacts of the 1982 and 1986 U.S. Tax Codes on Capital Investments: A Case Study of Investment in Orange Groves

1989 ◽  
Vol 21 (2) ◽  
pp. 107-115
Author(s):  
Charles B. Moss ◽  
Ronald P. Muraro ◽  
William G. Boggess
Keyword(s):  
Income Tax ◽  
Capital Investment ◽  
Tax Reform ◽  
Investment Decisions ◽  
The United States ◽  
Capital Investments ◽  
Fiscal Responsibility ◽  
Tax Rate ◽  
Tax Simplification

AbstractThe 1980s have been a period of dramatic change for the income tax code in the United States. Although numerous modifications were considered in policy deliberations, two key goals, the reduction of the importance of tax considerations in investment decisions and tax simplification, emerged from the discussion and guided drafting of the 1986 Tax Reform Act. This study examines the importance of tax considerations in investment decisions under the provisions of the Tax Reform Act of 1986 and its predecessor, the Tax Equity and Fiscal Responsibility Act of 1982. The study then compares the tax liability under these tax codes with a nondistortionary tax scheme. Results indicate that the Tax Reform Act of 1986 reduced the distortionary effects of the tax code on capital investment decisions. However, a large portion of the reduction can be attributed to the change in the average tax rate.

scholarly journals Explaining the Evolution of Educational Attainment in the United States

2016 ◽  
Vol 8 (3) ◽  
pp. 77-112 ◽  
Author(s):  
Rui Castro ◽  
Daniele Coen-Pirani
Keyword(s):  
Educational Attainment ◽  
Test Scores ◽  
Capital Investment ◽  
The United States ◽  
Investment Model ◽  
Learning Ability ◽  
Education Quality ◽  
College Graduation ◽  
Heterogeneous Learning ◽  
Over Time

We study the evolution of educational attainment of the 1932–1972 cohorts using a human capital investment model with heterogeneous learning ability. Inter-cohort variation in schooling is driven by changes in skill prices, tuition, and education quality over time, and average learning ability across cohorts. Under static expectations the model accounts for the main empirical patterns. Rising skill prices for college explain the rapid increase in college graduation until the 1948 cohort. The decline in average learning ability, calibrated to match the evolution of test scores, explains half of the stagnation in college graduation between the 1948 and 1972 cohorts. (JEL I23, I24, I26, J24, J31, N32)

Uncertainty and the Changing Oil Business Worldwide: Norwegian Petroleum Lawyers' Seminar, October 30, 1986

1987 ◽  
Vol 5 (2) ◽  
pp. 123-139
Author(s):  
J. E. McNabb
Keyword(s):  
Supply And Demand ◽  
Petroleum Industry ◽  
Price Volatility ◽  
The United States ◽  
Government Policies ◽  
Productive Capacity ◽  
Short Term ◽  
Considerable Excess ◽  
Oil Demand ◽  
Near Term

The petroleum industry is being challenged by price volatility and substantially reduced cash flow. In recent years, the decline in worldwide oil demand coupled with rising non-OPEC production has resulted in considerable excess productive capacity in the hands of OPEC. If OPEC fails to adhere to production restraint, world oil prices could tumble toward their short-term economic floor of less than $10. It appears more likely, however, that OPEC will manage its surplus capacity reasonably well and prices will fluctuate around the upper teen level for the near term. As the supply and demand balance tightens in the 1990s, prices can be expected to move up significantly. Free-world oil demand is expected to rise about 1% a year, with much of that growth in the developing nations and in the United States. Oil supply from sources outside OPEC will likely decline about 2% a year. The net result will be an expanded market for OPEC oil, and a rising world dependence on Middle East sources. In this environment, companies need responsive strategies and reasonable government policies to preserve their viability and to provide an energy-secure future for consumers.

scholarly journals Venture Capital Investments Models in Russia and the USA as Key Factor for Development of Innovative Enterprises

2019 ◽  
Vol 10 (4) ◽  
pp. 501-515
Author(s):  
A. G. Philippov ◽  
E. V. Gruzdeva
Keyword(s):  
Comparative Analysis ◽  
Venture Capital ◽  
Capital Investment ◽  
The United States ◽  
Theoretical Research ◽  
Capital Investments ◽  
Venture Capital Investment ◽  
The Usa ◽  
Investment Models ◽  
Venture Capital Investments

Purpose: this article aims to determine key characteristics features of venture capital investments models in the context of the development of innovative enterprises. For this purpose the authors conducted analysis of the current state and key differences of venture capital investments models in Russia and in the USA, determined fields and ways for further improvement of domestic models of venture capital investments.Methods: to achieve the stated goal, theoretical research methods - abstraction, analysis and synthesis were used. Adoption of these methods, led to analysis of the theoretical basis of venture capital investments models and identification of key features having the greatest practical significance. The models of venture capital investments in Russia and the USA were studied, and a quantitative and qualitative comparative analysis of the elements characterizing the models of venture capital investments was carried out. The study was based on the data published by the national associations of venture investors and the information database of venture capital companies Pitchbook.Results: this article reveals the importance of venture capital investments as the main factor affecting the innovative development of the Russian economy. In modern conditions, venture capital investments are a key tool that helps bring financial resources to young innovatively active companies. This article summarizes results of the study of the theoretical base of venture capital investments models and the historical dynamics of venture capital investments in Russia and the USA. A comparative analysis revealed similarities and differences between the following elements, characterizing the models of venture capital investments in Russia and the USA: stages of development of venture capital companies, types of investors and sources of venture financing, distribution of venture investments by industry, exit strategies and organizational forms of venture capital investments. The paper as well summarizes fields and ways for further improvement of models of venture capital investments based on a comparative analysis.Conclusions and Relevance: based on the conducted research and comparative analysis of venture capital investment models in Russia and the United States, the proposals for further improvement of Russian venture capital investment models were developed and presented in the article.

The impact of regulations on labor markets in the U.S.

2019 ◽  
Vol 1 (1) ◽  
pp. 36-40
Author(s):  
Souad Adnane
Keyword(s):  
Supply And Demand ◽  
Demand Model ◽  
Lead Teachers ◽  
Associate's Degree ◽  
Childcare Workers ◽  
Educational Requirements ◽  
The Cost ◽  
Women's Labor Force Participation ◽  
The Impact ◽  
The U.S

The District of Columbia (DC) Office of the Superintendent of Education (OSSE) issued in December 2016 new educational requirements for childcare workers, according to which, all childcare center directors in the District must earn a bachelor’s degree by December 2022 and all lead teachers an associate’s degree by December 2020 (Institute for Justice, 2018). Moreover, DC has one of the lowest staff-child ratios in the country. How are regulations pertaining to childcare workers’ qualifications and staff-child ratio affecting the childcare market in DC? The present paper is an attempt to answer this question first by analyzing the effects of more stringent regulations on the cost and availability of childcare in the U.S based on existing studies. It also uses the basic supply and demand model to examine the possible impact of the new DC policy on the cost, quality and supply of childcare in the District and how it will affect working parents, especially mothers. Next, the paper discusses the impact of deregulation based on simulations and regressions conducted by studies covering the U.S., and implications for quality. It concludes that more stringent childcare regulations, regarding educational requirements and staff-child ratios, are associated with a reduced number of childcare centers and a higher cost, and eventually affects women’s labor force participation.

Poisoned Earth

2017 ◽  
Author(s):  
Geoffrey Jones
Keyword(s):  
Solar Energy ◽  
Rural Areas ◽  
Small Firms ◽  
Social Activism ◽  
The United States ◽  
Oil Companies ◽  
Natural Beauty ◽  
Green Business ◽  
The 1960S ◽  
Start Ups

The chapter examines green business during the 1960s and 1970, decades of new environmental awareness. In organic food natural beauty, a number of commercially viable green businesses and brands began to be built, and distribution channels created. There was significant innovation in wind and solar energy in the wake of the first oil crises although they remained marginal in the energy industry. Green entrepreneurs still faced huge obstacles finding both capital and consumers. In the case of the capital-intensive solar energy business, the main solution was to sell start-ups to cash-rich oil companies. Green businesses clustered in hubs of environmental and social activism, such as Berkeley and Boulder in the United States, Allgäu in Germany, and rural areas of Denmark. These clusters enabled small firms to build skills and competences which could eventually be used to expand into more mainstream locations.

scholarly journals Minnesota—too late for a Sovereign Wealth Fund?

2021 ◽  
Author(s):  
Christopher R. McIntosh ◽  
Neil A. Wilmot ◽  
Adrienne Dinneen ◽  
Jason F. Shogren
Keyword(s):  
Renewable Resources ◽  
Iron Ore ◽  
Inflation Rate ◽  
Supply And Demand ◽  
Sovereign Wealth Funds ◽  
Funding Mechanism ◽  
Investment Return ◽  
Investment Returns ◽  
Fund Size ◽  
Forward Looking

AbstractTen states have created natural-resource-based Sovereign Wealth Funds (SWF) to allow a fraction of the wealth derived from the extraction of non-renewable resources to be available for future use. Minnesota does not have a SWF, even though companies have been mining in the state for over 100 years. Herein, we present backward and forward-looking scenarios to estimate the potential magnitude of a “what-if” extraction-based fund. A 1.5% of value tax is suggested as an SWF funding mechanism. Based on historical extraction, prices, and investment returns, a large SWF could already exist. In the forward-looking section, we begin by econometrically estimating the supply and demand of US iron ore production to better understand how an increase in mining taxes would likely effect mining output (i.e., the production effect). After accounting for an estimated 4% production loss, results suggest enough minerals could still be extracted to create a permanent fund with between $930 million (US) and $1.6 billion dollars (US) in direct contributions by 2050 (depending on price). Using reasonable assumptions of a 2% inflation rate and a 5% annual investment return, the fund size could range from $3 billion to $5 billion by 2050.

scholarly journals A socio-psychological modal choice approach to modelling mobility and energy demand for electric vehicles

2020 ◽  
Vol 3 (S1) ◽  
Author(s):  
Khoa Nguyen ◽  
René Schumann
Keyword(s):  
Energy Demand ◽  
Supply And Demand ◽  
Stochastic Approach ◽  
Social Characteristics ◽  
Limited Information ◽  
Demand Model ◽  
Modal Choice ◽  
Charging Infrastructure ◽  
Human Decision ◽  
Electro Mobility

Abstract The development of efficient electric vehicle (EV) charging infrastructure requires modelling of consumer demand at an appropriate level of detail. Since only limited information about real customers is available, most simulations employ a stochastic approach by combining known or estimated business features (e.g. arrival and departure time, requested amount of energy) with random variations. However, these models in many cases do not include factors that deal with the social characteristics of EV users, while others do not emphasise on the economic elements. In this work, we introduced a more detailed demand model employing a modal choice simulation framework based on Triandis’ Theory of Interpersonal Behaviour, which can be calibrated by empirical data and is capable of combining a diverse number of determinants in human decision-making. By applying this model on Switzerland mobility domain, an analysis on three of the most popular EV incentives from both supply and demand sides is provided, which aims for a better understanding of electro-mobility systems by relating its causes and effects.

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