Assessing the strength and effectiveness of renewable electricity feed-in tariffs in European Union countries

► This is the first econometric study of feed-in tariff (FIT) efficacy in Europe. ► We test the impact of FIT's on photovoltaic (PV) and wind power from 1992 to 2008. ► We calculate country- and year-specific return on investment provided by each FIT. ► FIT policies increased PV installations by ∼0.5% per ROI percentage point. ► Policy design, market traits, and ROI are more important factors than policy alone.