Renewable Energy Innovation and Technology Adoption: Mediating Role of Cost Perception and Moderating Role of Policy Incentives

Abstract

The transition to renewable energy is critical for sustainable development and reducing carbon emissions. Renewable energy innovation (REI) enhances the efficiency, reliability, and affordability of renewable technologies, but adoption rates remain influenced by stakeholders’ perceptions and policy frameworks. This study investigates the impact of REI on renewable energy technology (RET) adoption, emphasizing the mediating role of cost perception and the moderating effect of policy incentives. A quantitative survey was conducted with 260 respondents, including energy companies, technology developers, and consumers. Data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) to assess reliability, validity, and the significance of direct, mediating, and moderating paths. Findings indicate that REI positively influences technology adoption, with cost perception partially mediating this relationship. Lower perceived costs increase adoption likelihood, while policy incentives, such as subsidies, tax credits, and regulatory support, significantly moderate the REI–adoption relationship, amplifying adoption rates. These results highlight the interplay of technological, economic, and policy factors in renewable energy adoption. Practically, governments and organizations should design cost-effective innovations and implement supportive policies to accelerate technology uptake, contributing to sustainable energy transitions.