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Building vintage and electricity use: Old homes use less electricity in hot weather

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  • Chong, Howard

Abstract

This paper studies whether electricity use in newer or older residential buildings rises more in response to high temperature in a region of Southern California. Peak electricity demand occurs at the highest temperatures which are predicted to increase due to climate change. Understanding how newer buildings differ from older buildings improves forecasts of how peak electricity use will grow over time. Newer buildings are subject to stricter building energy codes, but are larger and more likely to have air conditioning; hence, the cumulative effect is ambiguous. This paper combines four large datasets of building and household characteristics, weather data, and utility data to estimate the electricity–temperature response of different building vintages. Estimation results show that new buildings (1970–2000) have a statistically significantly higher temperature response (i.e., use more electricity) than old buildings (pre1970). Auxiliary regressions with controls for tiered electricity prices, number of bedrooms, income, square footage, central air conditioning, ownership, and type of residential structure partially decompose the effect. Though California has had extensive energy efficiency building standards that by themselves would lower temperature response for new buildings, the cumulative effect of new buildings is an increase in temperature response. As new buildings are added, aggregate temperature response is predicted to increase.

Suggested Citation

  • Chong, Howard, 2012. "Building vintage and electricity use: Old homes use less electricity in hot weather," European Economic Review, Elsevier, vol. 56(5), pages 906-930.
  • Handle: RePEc:eee:eecrev:v:56:y:2012:i:5:p:906-930
    DOI: 10.1016/j.euroecorev.2012.02.009
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    References listed on IDEAS

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    Cited by:

    1. Chaudhary, Gaurav & New, Joshua & Sanyal, Jibonananda & Im, Piljae & O’Neill, Zheng & Garg, Vishal, 2016. "Evaluation of “Autotune” calibration against manual calibration of building energy models," Applied Energy, Elsevier, vol. 182(C), pages 115-134.
    2. Matthew J. Kotchen, 2015. "Do Building Energy Codes Have a Lasting Effect on Energy Consumption? New Evidence From Residential Billing Data in Florida," NBER Working Papers 21398, National Bureau of Economic Research, Inc.
    3. Makram El-Shagi & Claus Michelsen & Sebastian Rosenschon, 2014. "Regulation, Innovation and Technology Diffusion: Evidence from Building Energy Efficiency Standards in Germany," Discussion Papers of DIW Berlin 1371, DIW Berlin, German Institute for Economic Research.
    4. Fell, Harrison & Li, Shanjun & Paul, Anthony, 2014. "A new look at residential electricity demand using household expenditure data," International Journal of Industrial Organization, Elsevier, vol. 33(C), pages 37-47.
    5. Marius Claudy and Claus Michelsen, 2016. "Housing Market Fundamentals, Housing Quality and Energy Consumption: Evidence from Germany," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4).
    6. Arik Levinson, 2016. "How Much Energy Do Building Energy Codes Save? Evidence from California Houses," American Economic Review, American Economic Association, vol. 106(10), pages 2867-2894, October.
    7. Michael Chesser & Jim Hanly & Damien Cassells & Nikolaos Apergis, 2019. "Household Energy Consumption: A Study of Micro Renewable Energy Systems in Ireland," The Economic and Social Review, Economic and Social Studies, vol. 50(2), pages 265-280.
    8. Levinson, Arik, 2014. "California energy efficiency: Lessons for the rest of the world, or not?," Journal of Economic Behavior & Organization, Elsevier, vol. 107(PA), pages 269-289.
    9. Michelsen, Claus & El-Shagi, Makram & Rosenschon, Sebastian, 2016. "The diffusion of "green'' buildings in the housing market: empirics on the long run effects of energy efficiency regulation," Annual Conference 2016 (Augsburg): Demographic Change 145534, Verein für Socialpolitik / German Economic Association.
    10. Jones, Rory V. & Fuertes, Alba & Lomas, Kevin J., 2015. "The socio-economic, dwelling and appliance related factors affecting electricity consumption in domestic buildings," Renewable and Sustainable Energy Reviews, Elsevier, vol. 43(C), pages 901-917.
    11. J. Scott Holladay & Jacob LaRiviere, 2015. "The Impact of Cheap Natural Gas on Marginal Emissions from Electricity Generation and Implications for Energy," Working Papers 2015-07, University of Tennessee, Department of Economics.
    12. Koichiro Ito, 2015. "Asymmetric Incentives in Subsidies: Evidence from a Large-Scale Electricity Rebate Program," American Economic Journal: Economic Policy, American Economic Association, vol. 7(3), pages 209-237, August.
    13. Schmitz, Hendrik & Madlener, Reinhard, 2016. "Heterogeneity in Price Responsiveness for Residential Space Heating in Germany," FCN Working Papers 5/2015, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN), revised Nov 2016.
    14. Holladay, J. Scott & LaRiviere, Jacob, 2017. "The impact of cheap natural gas on marginal emissions from electricity generation and implications for energy policy," Journal of Environmental Economics and Management, Elsevier, vol. 85(C), pages 205-227.
    15. Chen Zhang & Hua Liao & Zhifu Mi, 2019. "Climate impacts: temperature and electricity consumption," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 99(3), pages 1259-1275, December.
    16. Fei Wang & Yili Yu & Xinkang Wang & Hui Ren & Miadreza Shafie-Khah & João P. S. Catalão, 2018. "Residential Electricity Consumption Level Impact Factor Analysis Based on Wrapper Feature Selection and Multinomial Logistic Regression," Energies, MDPI, Open Access Journal, vol. 11(5), pages 1-26, May.
    17. Lawrence D. LaPlue & Christopher A. Erickson, 2020. "Outsourcing, trade, technology, and greenhouse gas emissions," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 22(2), pages 217-245, April.
    18. Zachariadis, Theodoros & Hadjinicolaou, Panos, 2014. "The effect of climate change on electricity needs – A case study from Mediterranean Europe," Energy, Elsevier, vol. 76(C), pages 899-910.
    19. Matthew E. Kahn & Nils Kok & Peng Liu, 2016. "Is California More Energy Efficient than the Rest of the Nation? Evidence from Commercial Real Estate," NBER Working Papers 21912, National Bureau of Economic Research, Inc.
    20. Urs Fischbacher & Simeon Schudy & Sabrina Teyssier, 2015. "Heterogeneous Preferences and Investments in Energy Saving Measures," TWI Research Paper Series 95, Thurgauer Wirtschaftsinstitut, Universität Konstanz.
    21. Paloma Taltavull de La Paz & V. Raul Perez-Sanchez & Raul-Tomas Mora-Garcia & Juan-Carlos Perez-Sanchez, 2019. "Green Premium Evidence from Climatic Areas: A Case in Southern Europe, Alicante (Spain)," Sustainability, MDPI, Open Access Journal, vol. 11(3), pages 1-29, January.
    22. Kahn, Matthew E. & Kok, Nils & Quigley, John M., 2014. "Carbon emissions from the commercial building sector: The role of climate, quality, and incentives," Journal of Public Economics, Elsevier, vol. 113(C), pages 1-12.
    23. Anin Aroonruengsawat, Maximilian Auffhammer, and Alan H. Sanstad, 2012. "The Impact of State Level Building Codes on Residential Electricity Consumption," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1).
    24. Arthur Grimes, Nicholas Preval, Chris Young, Richard Arnold, Tim Denne, Philippa Howden-Chapman, and Lucy Telfar-Barnard, 2016. "Does Retrofitted Insulation Reduce Household Energy Use? Theory and Practice," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4).
    25. Arik Levinson, 2014. "How Much Energy Do Building Energy Codes Really Save? Evidence from California," NBER Working Papers 20797, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    Electricity; Temperature response; Demand forecast; Climate change impacts; Vintage-differentiated regulation; Building standards; California; Load factor; Rosenfeld effect;

    JEL classification:

    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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