Conference Agenda

Meeting national climate targets while accommodating rising electricity demand requires more renewable energy, implying further encroachment on natural areas and associated environmental external costs. While previous studies have examined the local environmental costs of wind power, ground-mounted solar power has received considerably less attention. Existing comparisons of the two technologies typically vary technology alongside other design features, leaving technology-specific costs partially confounded with design-specific responses. We provide the first causal estimates of the technology-specific local environmental costs of renewable energy development using a randomized split-sample discrete choice experiment with 1,563 respondents in Norway. Respondents are randomly assigned to one of two surveys that are identical in attributes, levels, and structure, differing only in whether the hypothetical projects are labeled as wind or solar power. Solar power generates lower local environmental costs than wind power, although both technologies entail substantial costs. Encroachment on undisturbed nature contributes most to welfare losses for solar power, while proximity to installations is the largest contributor for wind power. Welfare losses are also higher when developments are spatially dispersed rather than concentrated, conditional on equal electricity output. Estimated environmental external costs per kWh over a 10-year period for a 0.6 TWh development in an average municipality in the study region range from ¢0.28–¢1.09 per kWh for solar power and ¢0.78–¢1.54 per kWh for wind power, depending on nature protection, spatial concentration, population size, and proximity. A nature tax may help internalize these external costs and support more efficient and socially acceptable renewable energy deployment.