SOLAR PHOTOVOLTIAC EXPANSION AND EMPLOYMENT IN GERMANY

Abstract

This thesis investigates the relationship between solar PV expansion and employment in the NACE Rev. 2 sectors F42 (civil engineering) and F43 (specialized construction activities) in the NUTS-2 regions of Germany. For this purpose, annual data at the NUTS-2 level for the period 2009–2022 are used. The study seeks to examine whether there exist positive employment effects and whether these depend on regional heterogeneities. To investigate the relationship, a two-way fixed effects panel data analysis is employed in order to control for unobserved heterogeneity. In addition, an interaction variable is introduced to examine how the effect of annual newly installed solar PV capacity on employment changes when population density increases. To verify the results, robustness checks are carried out, which include, among others, alternative model specifications and the exclusion of outliers such as the city-states. The results of the main model specifications of this thesis are not significant. The interaction effect, namely that the effect of annual newly installed solar PV capacity on employment becomes stronger with increasing population density, is positive but insignificant. Most robustness checks support these findings, although some detect a significant effect. With regard to the EU Energy Transition, it can be concluded that regional disparities should be incorporated into policy design and that possible skill shortages should also be addressed. Furthermore, this study underlines the importance of the availability of more disaggregated data to provide more precise results.