The role of feed-in tariffs in encouraging insurance companies to invest in renewables

Zhytar, Maksym and Lyeonov, S and Artyukhov, A and Bokenchina, L and Sitenko, D and Yehorova, Y and Moroz, A (2025) The role of feed-in tariffs in encouraging insurance companies to invest in renewables Insurance Markets and Companies, 16 (1). pp. 115-130. ISSN 2616-3551

Text S_Lyeonov_A_Artyukhov_L_Bokenchina_D_Sitenko_Y_Yehorova_M_Zhytar_A_Moroz_IMC_16_2025.pdf - Published Version Download (487kB)

Abstract

In an environment where public funding is insufficient to meet international climate and energy goals, feed-in tariffs serve as an essential mechanism to mitigate investment risk and foster the participation of insurance companies as institutional investors in the renewable energy sector. This study aims to investigate whether feed-in tariff policies enhance the evolving effect of insurance sector development on renewable energy consumption across countries and over time. Given that both financial sector capacity and renewable energy transitions are dynamic processes, the analysis explicitly applies econometric techniques designed to capture temporal changes and investment inertia. Using panel data econometric techniques, including fixed effects models with cluster-robust standard errors and dynamic panel estimation (Arellano-Bond GMM), the analysis covers 64 countries from 2000 to 2020. The results reveal that greater insurance sector assets positively correlate with higher renewable energy consumption, with a coefficient of 0.143 (p < 0.01) in the fixed effects model. Still, the strength and significance of this relationship are notably enhanced when feed-in tariffs are in place, as shown by a positive and statistically significant interaction term (coefficient 0.051, p < 0.05) after adding time-fixed effects. The empirical results show that insurance companies can serve as critical institutional investors in the renewable energy sector. Still, their active participation critically depends on supportive policy frameworks, with the positive association between insurance company assets and renewable energy consumption becoming significant, particularly in countries with feed-in tariff schemes.

Item Type:	Article
Uncontrolled Keywords:	dynamic panel model; energy transition; feed-in tariff; institutional investors; insurance sector; renewable energy sources
Subjects:	Статті у базах даних > Scopus > У виданнях Q3 Scopus
Divisions:	Факультет економіки та управління > Кафедра фінансів
Depositing User:	Професор Максим Олегович Житар
Date Deposited:	23 Jun 2025 08:41
Last Modified:	23 Jun 2025 08:41
URI:	https://elibrary.kubg.edu.ua/id/eprint/52169

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