Quantifying the Rebound Effects of Solar Panel Adoption
April 4, 2019 | 12:30 – 2:00 PM EST
Johns Hopkins University School of Advanced International Studies
1619 Massachusetts Ave. NW 20036
Customers who adopt solar panels can reduce their energy bills and lower the effective average electricity prices they pay. When the price falls, a solar consumer might consume more electricity than before – a solar rebound effect. We provide the first empirical evidence of solar rebound effects in the U.S. for both the residential and business sectors, using consumer-level hourly electricity meter data as well as hourly individual solar panel electricity generation data from 2013-2018 for a large sample of residential and business electric consumers in Arizona. For the residential sector, we find that when solar electricity generation increases by 1kWh, solar homes increase their total electricity consumption by 0.18kWh.
Building upon our theoretical framework, the increase in consumer surplus from solar panel adoption is estimated at $1179/yr. For business electric consumers, we show that when distributed solar panels increase solar electricity generation by 1kWh, business solar consumers on average increase their gross electricity consumption by 0.82kWh. We also show that due to rebound effects business distributed solar consumers might create a challenge to the utilities by increasing their monthly maximum demand in July and August, thus potentially requiring utilities to invest more in maximum generation capacity. Our results imply that rebound effects play a significant role in evaluating the potential benefits from distributed solar panel adoption.
About the Speaker:
Lucy Qiu is an assistant professor in the School of Public Policy at University of Maryland College Park. Her main research expertise is in energy economics, with a focus on using big data with quasi-experimental methods to answer empirical questions related to the interactions among consumer behaviors, energy technologies, and incentives. She has published articles in journals such as Journal of Environmental Economics and Management (JEEM), Nature Sustainability, Resource and Energy Economics (REE), and Environmental and Resource Economics (ERE). Her research projects have been funded by National Science Foundation, Department of Defense, Water Research Foundation, and Western Resource Advocates. She currently works on a project related to big data and energy efficiency, funded by an NSF CAREER award. Qiu received an M.A. and Ph.D. from Stanford University and a B.Eng. from Tsinghua University. She was previously an assistant professor in resource economics at Arizona State University before joining Maryland.