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Time-of-Use Electricity Pricing and Residential Low-carbon Energy Technology Adoption

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Listed:
  • Jing Liang
  • Pengfei Liu
  • Yueming Qiu
  • Yi David Wang
  • Bo Xing

Abstract

This paper provides the first empirical evidence on the correlation between Time-Of-Use (TOU) electricity pricing and the adoption of energy efficient appliances and solar panels. We use household-level data in Phoenix, Arizona from an appliance saturation survey of about 16,000 customers conducted by a major electric utility. Our empirical results show that TOU consumers are associated with 27% higher likelihood to install solar panels but not more likely to adopt energy-efficient air conditioning based on the propensity score matching and coarsened exact matching methods. The findings highlight that policy makers could combine TOU and solar panels when implementing educational programs or when giving out financial incentives to consumers. Our results imply that TOU is associated with a similar impact of the incentive offered by $2,070∼$10,472 tax credits or rebates on solar adoption.

Suggested Citation

  • Jing Liang & Pengfei Liu & Yueming Qiu & Yi David Wang & Bo Xing, 2020. "Time-of-Use Electricity Pricing and Residential Low-carbon Energy Technology Adoption," The Energy Journal, , vol. 41(3), pages 1-38, May.
    • Handle: RePEc:sae:enejou:v:41:y:2020:i:3:p:1-38
    DOI: 10.5547/01956574.41.2.jlia
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    References listed on IDEAS

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    1. Kenneth Gillingham & Karen Palmer, 2014. "Bridging the Energy Efficiency Gap: Policy Insights from Economic Theory and Empirical Evidence," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 8(1), pages 18-38, January.
    2. Comin, Diego & Rode, Johannes, 2013. "From Green Users to Green Voters," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 63678, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    3. Stephen P. Holland & Erin T. Mansur & Nicholas Z. Muller & Andrew J. Yates, 2016. "Are There Environmental Benefits from Driving Electric Vehicles? The Importance of Local Factors," American Economic Review, American Economic Association, vol. 106(12), pages 3700-3729, December.
    4. Kevin Novan & Aaron Smith, 2018. "The Incentive to Overinvest in Energy Efficiency: Evidence from Hourly Smart-Meter Data," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 5(3), pages 577-605.
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    Cited by:

    1. Sun, Bixuan & Sankar, Ashwini, 2022. "The changing effectiveness of financial incentives: Theory and evidence from residential solar rebate programs in California," Energy Policy, Elsevier, vol. 162(C).
    2. Salim Turdaliev, 2021. "Increasing Block Rate Electricity Pricing and Propensity to Purchase Electrical Appliances: Evidence from a Natural Experiment in Russia," Energies, MDPI, vol. 14(21), pages 1-20, October.
    3. Hancevic, Pedro I. & Sandoval, Hector H., 2023. "Solar panel adoption among Mexican small and medium-sized commercial and service businesses," Energy Economics, Elsevier, vol. 126(C).
    4. Liang, Jing & Qiu, Yueming (Lucy) & Xing, Bo, 2022. "Impacts of the co-adoption of electric vehicles and solar panel systems: Empirical evidence of changes in electricity demand and consumer behaviors from household smart meter data," Energy Economics, Elsevier, vol. 112(C).
    5. Rohan Best & Ryan Esplin, 2023. "Household Solar Analysis for Policymakers: Evidence from U.S. Data," The Energy Journal, , vol. 44(1), pages 195-214, January.
    6. Lu-Miao Li, Peng Zhou, and Wen Wen, 2023. "Distributed Renewable Energy Investment: The Effect of Time-of-Use Pricing," The Energy Journal, International Association for Energy Economics, vol. 0(Number 5).
    7. Bejan, Ioana & Jensen, Carsten Lynge & Andersen, Laura M. & Hansen, Lars Gårn, 2021. "Inducing flexibility of household electricity demand: The overlooked costs of reacting to dynamic incentives," Applied Energy, Elsevier, vol. 284(C).
    8. Minseok Jang & Hyun Cheol Jeong & Taegon Kim & Dong Hee Suh & Sung-Kwan Joo, 2021. "Empirical Analysis of the Impact of COVID-19 Social Distancing on Residential Electricity Consumption Based on Demographic Characteristics and Load Shape," Energies, MDPI, vol. 14(22), pages 1-15, November.

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    More about this item

    Keywords

    Time-of-use (TOU) electricity pricing; Solar panels; Energy efficiency;
    All these keywords.

    JEL classification:

    • F0 - International Economics - - General

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