The role of feed-in tariffs in encouraging insurance companies to invest in renewables
Lyeonov S. Artyukhov A. Bokenchina L. Sitenko D. Yehorova Y. Zhytar M. Moroz A.
2025LLC CPC Business Perspectives
Insurance Markets and Companies
2025#16Issue 1115 - 130 pp.
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.
dynamic panel model , energy transition , feed-in tariff , institutional investors , insurance sector , renewable energy sources
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University of Technology, Sumy State University, Ukraine
University of Economics in Bratislava, Slovakia
WSEI University, Poland
Sumy State University, Ukraine
K. Kulazhanov Kazakh University of Technology and Business, Kazakhstan
Karaganda University named after academician Ye. A. Buketov, Kazakhstan
Research Institute of Trade and Sustainable Business, Faculty of Commerce, University of Economics in Bratislava, Slovakia
the Department of Finance, Borys Grinchenko Kyiv Metropolitan University, Ukraine
Economic Cybernetics Department, Sumy State University, Ukraine
University of Technology
University of Economics in Bratislava
WSEI University
Sumy State University
K. Kulazhanov Kazakh University of Technology and Business
Karaganda University named after academician Ye. A. Buketov
Research Institute of Trade and Sustainable Business
the Department of Finance
Economic Cybernetics Department
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