Solar photovoltaic interventions have reduced rural poverty in China

Since 2013, China has implemented a large-scale initiative to systematically deploy solar photovoltaic (PV) projects to alleviate poverty in rural areas. To provide new understanding of China’s targeted poverty alleviation strategy, we use a panel dataset of 211 pilot counties that received targeted PV investments from 2013 to 2016, and find that the PV poverty alleviation pilot policy increases per-capita disposable income in a county by approximately 7%-8%. The effect of PV investment is positive and significant in the year of policy implementation and the effect is more than twice as high in the subsequent two to three years. The PV poverty alleviation effect is stronger in poorer regions, particularly in Eastern China. Our results are robust to alternative specifications and variable definitions. We propose several policy recommendations to sustain progress in China’s efforts to deploy PV for poverty alleviation.