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Distance and intensity effects of renewable energy on property prices: A hedonic price analysis for Germany

Author

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  • Heuer, Felix
  • Sommer, Stephan

Abstract

Huge low-carbon investments are required to reach the goals of the Paris Agreement. However, one obstacle for these investments may be public opposition to the installment of low-carbon technology due to high perceived net costs. In this paper, we analyze the local net costs of both wind turbines and PV farms, employing a hedonic price analysis on the universe of housing ads from German's largest online real estate platform for the period spanning from 2009 to 2021. Beyond estimating average treatment effects, we focus on distance and intensity specific effects of wind turbines and PV farms on property prices. Moreover, we add to the existing literature by estimating the effect not only of the nearest energy facility. We find that wind turbines exhibit a negative effect of 1.8-1.9% on property prices that fades out after 3 km of distance. This effect seems to become larger the more wind turbines are installed in the proximity of a property. PV farms reduce property prices more locally only up to a 2 km distance by 1.9%.

Suggested Citation

  • Heuer, Felix & Sommer, Stephan, 2025. "Distance and intensity effects of renewable energy on property prices: A hedonic price analysis for Germany," Ruhr Economic Papers 1143, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    • Handle: RePEc:zbw:rwirep:319072
    DOI: 10.4419/96973326
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    More about this item

    Keywords

    Renewable energy; hedonic prices; heterogeneity;
    All these keywords.

    JEL classification:

    • Q21 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Demand and Supply; Prices
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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