Journey toward affordable and modern energy: Role of income inequality and technological innovation

Abstract Promoting the shift toward clean and sustainable energy sources has been a key policy priority for the United Kingdom, as it is recognized as a critical pathway towards achieving carbon neutrality targets. Based on this, the study explored the impact of technological innovations, financial development, and income inequality on renewable energy consumption using data from 1980Q1 to 2021Q4. Taking into account the nonlinear and non‐normal distribution of the variables, the study employed wavelet‐based quantile techniques. Specifically, wavelet quantile ADF and PP tests were utilized to examine the stationarity properties of the data across different time horizons and quantiles. Additionally, wavelet quantile‐on‐quantile regression was used which focuses on various time horizons and quantiles. As a robustness check, wavelet quantile regression and average wavelet quantile‐on‐quantile regression were applied. The results revealed that across all time‐scales (short, medium and long‐term) and quantiles (0.1–0.90), economic growth, income inequality, and financial development positively influence renewable energy consumption. In addition, technological innovations were found to have mixed effect on renewable energy consumption. The study proposed policies based on these findings.