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Assessing the impact of solar PV on domestic electricity consumption: Exploring the prospect of rebound effects

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  • Deng, Gary
  • Newton, Peter

Abstract

This study examines patterns of electricity use by households in Sydney who have installed solar photovoltaic (PV) technology compared to those who have not in order to assess the impact of government solar incentive schemes, and to identify whether conservation or rebound (increased consumption) effects are associated with rooftop PV. Findings have significance in determining whether a rebound effect needs to be factored into projected energy/carbon savings from solar PV installation. At issue is the robustness of carbon mitigation estimates included in future rounds of international climate change agreements as well as local forecasts of future electricity demand affecting the national grid. Analysis and modelling was undertaken on billing data for the period 2007–2014 on a representative sample of 4819 households. The sample comprised three groups: households who were early adopters and installed PV under a 60c/kWh gross feed-in tariff scheme, a group who installed under a 20c/KWh gross feed-in scheme and a control group with no PV. Econometric modelling undertaken on energy consumption behaviour of households with versus without local renewable energy generation revealed that on a kWh basis, the rebound effect is estimated to erode up to one fifth of the carbon benefit of renewable energy generated by solar PV.

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  • Deng, Gary & Newton, Peter, 2017. "Assessing the impact of solar PV on domestic electricity consumption: Exploring the prospect of rebound effects," Energy Policy, Elsevier, vol. 110(C), pages 313-324.
    • Handle: RePEc:eee:enepol:v:110:y:2017:i:c:p:313-324
    DOI: 10.1016/j.enpol.2017.08.035
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    2. Galvin, Ray & Dütschke, Elisabeth & Weiß, Julika, 2021. "A conceptual framework for understanding rebound effects with renewable electricity: A new challenge for decarbonizing the electricity sector," Renewable Energy, Elsevier, vol. 176(C), pages 423-432.
    3. Qiu, Yueming & Kahn, Matthew E. & Xing, Bo, 2019. "Quantifying the rebound effects of residential solar panel adoption," Journal of Environmental Economics and Management, Elsevier, vol. 96(C), pages 310-341.
    4. Ross C. Beppler & Daniel C. Matisoff & Matthew E. Oliver, 2023. "Electricity consumption changes following solar adoption: Testing for a solar rebound," Economic Inquiry, Western Economic Association International, vol. 61(1), pages 58-81, January.
    5. Atasoy, Ayse Tugba & Schmitz, Hendrik & Madlener, Reinhard, 2021. "Mechanisms for Rebound Effects of Solar Electricity Prosuming in Germany," FCN Working Papers 10/2021, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN), revised 01 Jun 2023.
    6. Kim, Jae D. & Trevena, William, 2021. "Measuring the rebound effect: A case study of residential photovoltaic systems in San Diego," Utilities Policy, Elsevier, vol. 69(C).
    7. Boccard, Nicolas & Gautier, Axel, 2021. "Solar rebound: The unintended consequences of subsidies," Energy Economics, Elsevier, vol. 100(C).
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    9. Aydın, Erdal & Brounen, Dirk & Ergün, Ahmet, 2023. "The rebound effect of solar panel adoption: Evidence from Dutch households," Energy Economics, Elsevier, vol. 120(C).
    10. Qiu, Yueming (Lucy) & Wang, Yi David & Xing, Bo, 2021. "Grid impact of non-residential distributed solar energy and reduced air emissions: Empirical evidence from individual-consumer-level smart meter data," Applied Energy, Elsevier, vol. 290(C).
    11. Peter M. Schwarz, Nathan Duma, and Ercument Camadan, 2023. "Compensating Solar Prosumers Using Buy-All, Sell-All as an Alternative to Net Metering and Net Purchasing: Total Use, Rebound, and Cross Subsidization," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1).
    12. Mohd Irfan & Bamadev Mahapatra & Raj Kumar Ojha, 2021. "Examining the effectiveness of low-carbon strategies in South Asian countries: the case of energy efficiency and renewable energy," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(8), pages 11936-11952, August.
    13. López Prol, Javier & Steininger, Karl W., 2020. "Photovoltaic self-consumption is now profitable in Spain: Effects of the new regulation on prosumers’ internal rate of return," Energy Policy, Elsevier, vol. 146(C).
    14. Juan Pablo Fernández Goycoolea & Gabriela Zapata-Lancaster & Christopher Whitman, 2022. "Operational Emissions in Prosuming Dwellings: A Study Comparing Different Sources of Grid CO 2 Intensity Values in South Wales, UK," Energies, MDPI, vol. 15(7), pages 1-24, March.
    15. Frondel, Manuel & Kaestner, Kathrin & Sommer, Stephan & Vance, Colin, 2021. "Photovoltaics and the Solar Rebound: Evidence for Germany," VfS Annual Conference 2021 (Virtual Conference): Climate Economics 242356, Verein für Socialpolitik / German Economic Association.
    16. Junhyung Kim & Keon Baek & Eunjung Lee & Jinho Kim, 2023. "Analysis of Net-Metering and Cross-Subsidy Effects in South Korea: Economic Impact across Residential Customer Groups by Electricity Consumption Level," Energies, MDPI, vol. 16(2), pages 1-14, January.
    17. Fikru, Mahelet G. & Gautier, Luis, 2023. "Consumption and production of cleaner energy by prosumers," Energy Economics, Elsevier, vol. 124(C).
    18. Kenta Tanaka & Clevo Wilson & Shunsuke Managi, 2022. "Impact of feed-in tariffs on electricity consumption," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 24(1), pages 49-72, January.
    19. Chen, Yang & Shao, Shuai & Fan, Meiting & Tian, Zhihua & Yang, Lili, 2022. "One man's loss is another's gain: Does clean energy development reduce CO2 emissions in China? Evidence based on the spatial Durbin model," Energy Economics, Elsevier, vol. 107(C).
    20. Amelung, Torsten, 2021. "The Impact of Distributed Solar Power Generation on the Demand and the Use of Electricity in Households," EconStor Research Reports 235236, ZBW - Leibniz Information Centre for Economics.
    21. Frondel, Manuel & Kaestner, Kathrin & Sommer, Stephan & Vance, Colin, 2022. "Photovoltaics and the solar rebound: Evidence for Germany," Ruhr Economic Papers 954, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    22. Toroghi, Shahaboddin H. & Oliver, Matthew E., 2019. "Framework for estimation of the direct rebound effect for residential photovoltaic systems," Applied Energy, Elsevier, vol. 251(C), pages 1-1.
    23. Matthew E. Oliver & Juan Moreno-Cruz & Ross C. Beppler, 2019. "Microeconomics of the rebound effect for residential solar photovoltaic systems," CESifo Working Paper Series 7635, CESifo.
    24. Sommerfeldt, Nelson & Lemoine, Ida & Madani, Hatef, 2022. "Hide and seek: The supply and demand of information for household solar photovoltaic investment," Energy Policy, Elsevier, vol. 161(C).
    25. Niamir, Leila & Filatova, Tatiana & Voinov, Alexey & Bressers, Hans, 2018. "Transition to low-carbon economy: Assessing cumulative impacts of individual behavioral changes," Energy Policy, Elsevier, vol. 118(C), pages 325-345.

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