Measuring the Contribution to the Economy of Investments in Renewable Energy: Estimates of Future Consumer Gains

The authors develop a cost index–based measure of the expected consumer welfare gains from innovation in electricity generation technologies. To illustrate their approach, the authors estimate how much better off consumers would be from 2000 to 2020 as renewable energy technologies continue to be improved and gradually adopted, compared with a counterfactual scenario that allows for continual improvement of conventional technology.