Revenue Neutral Electricity Conservation Programs

26 Pages Posted: 10 Aug 2018 Last revised: 1 Oct 2019

See all articles by Brandon Schaufele

Brandon Schaufele

University of Western Ontario - Richard Ivey School of Business

Date Written: August 6, 2019

Abstract

Using monthly account level data for over 27,000 households between 2007 and 2014, this study evaluates a revenue-neutral municipal electricity conservation program. Rebates for the purchase of energy efficient appliances were financed via a small surcharge on high consuming households. The results demonstrate that the program mainly transferred money between residents with almost no effect on electricity consumption. Using variation in the timing of the rebate checks, none of the energy efficiency incentives yielded a statistically or economically meaningful reduction in electricity consumption compared with a counterfactual where no rebate was offered. Using a bunching estimator and exploiting changes in behavior around the high consumption threshold, a small reduction in electricity consumption is attributable to the surcharge, suggesting that prices are better than subsidies at reducing electricity consumption. Overall, the change in behavior attributable to the electricity conservation program is small, supporting recent evidence that many energy efficiency programs underperform in real-world settings.

Keywords: electricity demand, energy conservation, feebate

JEL Classification: H23, Q48, Q58

Suggested Citation

Schaufele, Brandon, Revenue Neutral Electricity Conservation Programs (August 6, 2019). Available at SSRN: https://ssrn.com/abstract=3220501 or http://dx.doi.org/10.2139/ssrn.3220501

Brandon Schaufele (Contact Author)

University of Western Ontario - Richard Ivey School of Business ( email )

1151 Richmond Street North
London, Ontario N6A 3K7
Canada

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