Investigating the relationship between financial development and renewable energy consumption in Türkiye: Extended ARDL border test application

This study aims to analyze the impact of financial development on renewable energy consumption in Türkiye. The study was conducted using annual data for the period 1990–2023 and was analyzed using the Augmented ARDL (A-ARDL) bounds test to reveal the long-term and short-term relationships between the variables. The findings show that financial development significantly and positively affects renewable energy consumption in the long term through the credit channel. In addition, the error correction mechanism in the model is strong and reveals that the system recovers quickly from imbalances. In the short-term findings, it was shown that credit and stock exchange have positive and negative effects on renewable energy consumption. In line with the results obtained, it is suggested that energy policies in Türkiye should be supported by sustainable financing instruments and that aligning the financial system with environmental goals is of critical importance for the success of the energy transformation process.