Proportion of renewable energy consumption and economic growth: theoretical and empirical analysis

The energy consumption revolution led by renewable energy replacing fossil energy has become an important means of energy conservation, emission reduction, quality improvement, and efficiency enhancement to achieve sustainable development. Based on the perspective of energy consumption value, this paper introduces renewable energy and fossil energy into Solow growth model and theoretically analyzes the economic growth effect of renewable energy replacing fossil energy. It shows that with the increase of the proportion of renewable energy in the short term, there is an inverted “U-shaped” curve, in which economic growth increases first and then decreases. Subsequently, this paper selects 34 countries from the year of 2007 to 2017 as sample data to verify the theoretical hypothesis. The results provide evidence to the theoretical hypothesis, and the economic growth will decrease once the proportion of renewable energy consumption reaches to 58% approximately. At present, most countries have not yet reached this inflection point and then can promote renewable energy development by building technological innovation-driven systems and distributed energy systems.