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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. 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.
    2. 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.
    3. 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.
    4. 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.
    5. Fell, Harrison & Li, Shanjun & Paul, Anthony, 2010. "A New Look at Residential Electricity Demand Using Household Expenditure Data," Discussion Papers dp-10-57, Resources For the Future.
    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. 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.
    8. 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.
    9. 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.
    10. 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.
    11. 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.
    12. Urs Fischbacher & Simeon Schudy & Sabrina Teyssier, 2015. "Heterogeneous Preferences and Investments in Energy Saving Measures," TWI Research Paper Series 95, Thurgauer Wirtschaftsinstitut, Universität Konstanz.
    13. Hendrik Schmitz & Reinhard Madlener, 2016. "Heterogeneity in Price Responsiveness for Residential Space Heating in Germany," SOEPpapers on Multidisciplinary Panel Data Research 877, DIW Berlin, The German Socio-Economic Panel (SOEP).
    14. 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.
    15. 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.
    16. 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).
    17. 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).
    18. 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).
    19. repec:eee:jeeman:v:85:y:2017:i:c:p:205-227 is not listed on IDEAS
    20. 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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