Renewable Energy Adoption, Energy Price Volatility, and Economic Growth: The Moderating Role of Technological Innovation

Abstract

Although there is an increasing focus on renewable energy source and economic stability, studies on the impacts of renewable energy implementation on the economic growth with changing energy prices are scarce. The gap that is solved in this study is that of investigating the effect of adoption of renewable energy on economic growth in terms of moderation by technological innovation. Based on the information obtained with the help of survey of 180 renewable energy companies and stakeholders in the energy sector in Jordan, it can be concluded that the introduction of renewable energy is a major factor that leads to economic growth especially during the times when energy prices are volatile. The results also indicate that the beneficial effect of renewable energy use on economic development has a greater power where the level of technological innovations is high demonstrating the high importance of efficient technologies in the efficiency and stability of the sector. These lessons can be the addition to the existing literature on energy economics, policy design, and sustainable development, providing the practical implications to policymakers and investors who would like to encourage the use of REA in the emerging economies.