Electric Power Systems Research 213 (2022) 108669 Available online 11 August 2022 0378-7796/© 2022 Elsevier B.V. All rights reserved. Threshold effects of renewable energy consumption by source in U. S. economy Lotf Hocine Zabat a, * , Naima Akli Sadaoui a , Mehdi Abid b, * , Habib Sekraf c a Department of Business Management, College of Business, Jouf University, Skaka, Saudi Arabia b Department of Finance and Investment, College of Business, Jouf University, Skaka, Saudi Arabia c Department of Quantitative Methods, Faculty of Economics and Management, Sousse University, Sousse, Tunisia A R T I C L E INFO Keywords: Economic growth Renewable energy sources consumption Threshold Non linearity ABSTRACT With the climate challenges and the depletion of fossil resources, the renewable energy option seems to be a wise choice; this renews the debate on the relationship between renewable energy sources consumption and economic growth. This study relies on a threshold effects regression model to explore and evaluate the non-linear rela- tionship between the series in the United States during the period 1984Q1–2021Q3. Using the threshold detection method proposed by Hansen and Seo (2002), the results of this method show that the renewable energy sources consumption/GDP relationship is non-linear. They also reveal, for all the different sources, an optimal renewable energy sources consumption/GDP threshold of 5.535; 2.715; 1.988 and 8.925% for BIO, GEO, Solar and HPower, respectively. The results indicate the presence of mixed directions of causality between the renewable energy sources consumption and GDP, using the Threshold Vector Error Correction model (TVECM). The fndings of this paper suggest that if the United States aim to realize positive economic growth from their investment to renewable energy, they need to surpass a certain threshold of renewable energy sources consumption. 1. Introduction One of the central conclusions of neoclassical theory concerns the decisive role of energy consumption in explaining nations’ long-term growth dynamics [8,19]. However, despite the various forms it can take, energy consumption has long been the preferred indicator of much of the economic literature examining the links between energy con- sumption and economic growth ([1,6,21,23,29,31,33,34] among others). Countries around the world are increasingly aware of the crucial role of renewable energy and energy effciency in combating climate change, creating new economic opportunities, and expanding access to energy for the billions of people still deprived of modern energy services. Over the past decade, and especially recently, the advances made possible by renewable energy technologies, added capacities and rapid cost reductions are largely due to political support which has attracted large investments and reduced costs through economies of scale. Renewable energy continued to develop in 2014 in a context marked by strong growth in global energy consumption and a sharp decline in oil prices during the second half of the year (EIA, 2015). Renewable energy made signifcant progress in 2014 in terms of installed capacity and energy produced, and investments in renewables in the power sector exceeded net investments in fossil-fueled power plants [22]. The power sector is experiencing the fastest growth as well as the largest increase in renewable energy capacity. It is dominated by three sources: wind en- ergy, solar photovoltaic energy and hydropower. Political support for renewable energy has contributed to increasing the market volume and strengthening global competition [24]. The noticeable fall in costs, especially in solar photovoltaics and wind power, has helped the advancement of electrifcation in transportation and heating applications and highlighted the future overlap opportunities among sectors [7]. In many countries, renewable energy is clearly competitive with traditional fuels, particularly in the power sector. In developed countries, and particularly in the United States, distributed renewable energy systems offer an unprecedented opportunity to accelerate the transition to modern energy services and expand energy access [1]. Although the fall in the price of solar photovoltaic energy put this technology at the forefront of advantageous power sources for off-grid electrifcation, access to upstream fnance or the necessary equipment continued to be a major obstacle in 2014 [28]. There is no doubt that renewable energy has become the major energy resource. * Corresponding author. E-mail addresses: lzabat@ju.edu.sa (L.H. Zabat), meabid@ju.edu.sa (M. Abid). Contents lists available at ScienceDirect Electric Power Systems Research journal homepage: www.elsevier.com/locate/epsr https://doi.org/10.1016/j.epsr.2022.108669 Received 12 March 2022; Received in revised form 25 May 2022; Accepted 23 July 2022