Impacts of renewables obligation with recycling of the buy-out fund

► The renewables obligation (RO) program in UK redistributes the buy-out fund to those who have submitted ROCs. ► Price of ROCs and hence the renewable energy output increases with the shortfall of renewable energy relative to the RO target. ► Empirical tests suggest that RO in the UK is likely to increase renewables output. ► Integration between conventional and renewables production is unlikely to affect the performance of RO program. ► RO with redistribution is more responsive to market and social preferences than FiT programs.