My Publications
Renewable Energy and Economic Growth: An Empirical Analysis of the Relationship between Solar Power and GDP
Izuchukwu Precious OBANI, Zino IZU-OBANI, Theresa Ojevwe AKROH,
07-11-2024
This study explored the impact of renewable energy on economic growth, with a specific focus on analyzing the relationship between solar power and GDP. Utilizing an ex post facto research design, the formulated model was estimated using the ordinary least squares regression technique. Data for the study were obtained from the World Bank’s World Development Indicators, covering the period from 1990 to 2023. The findings revealed that renewable energy consumption, used as a proxy for solar power, has a positive but statistically insignificant impact on economic growth. Carbon emissions exhibited a positive and significant effect on economic growth. Similarly, foreign direct investment showed a positive and significant effect on economic growth. The trade balance also had a positive impact, though it was not statistically significant. Additionally, the study found that solar power consumption does not have a statistically significant causal effect on GDP, but GDP does Granger-cause solar power consumption. A bidirectional causality exists between carbon emissions and GDP. Based on these findings, the study recommends that the government increase investment in solar infrastructure, implement policies that support a gradual transition to renewable energy sources alongside carbon mitigation strategies, and foster an investor-friendly environment through measures such as tax incentives and streamlined regulatory processes.