Assessing the effectiveness of the 2011 feed-in tariff policy for wind power in Finland

Abstract

In 2011, Finland implemented a feed-in tariff in order to accelerate investments in wind power production throughout the country, since the wind power industry was not meeting the target production volume. The Finnish feed-in tariff stopped accepting new wind power projects into the scheme in 2017, and this study performed an analysis of the overall effectiveness of the feed-in tariff by aiming to answer the question: “Did the feed-in tariff implemented in 2011 enhance the deployment of wind power in Finland and to what extent?”. By employing an econometric approach using binary and difference-in-difference models, the effect of the feed-in tariff and other factors associated with wind power deployment were estimated. In the obtained results, the feed-in tariff displayed a large positive relationship to the amount of nominal wind power in a region. This research contributes to the existing literature by providing insights into the effectiveness of the wind power feed-in tariff in Finland, where such analysis has not been conducted so far, while also comparing the obtained results to those found in other countries.