The Rebound Effect of Solar Panel Adoption: Evidence from Dutch Households

25 Pages Posted: 23 May 2022

See all articles by Erdal Aydin

Erdal Aydin

Sabanci University - Sabanci University

Dirk Brounen

Tilburg University

Ahmet Ergun

University of Virginia

Date Written: May 10, 2022

Abstract

Households adopt solar panels for different reasons, but always with a reduced electricity bill in mind. However, the access to solar power at near zero marginal costs may well induce rebound effects which shift households' demand curve and distort the net effects of solar PV investments. By analyzing high frequency data on electricity consumption and production of the households, we estimate the rebound effect of residential solar panel adoption. We document a rebound effect of 7.7 percent, a result that is robust to different sample and model specifications. We also find that households shift their consumption to the time periods when solar electricity production is higher. The solar PV rebound effect shows heterogeneity across time, production level and household characteristics, with higher rebound effects during seasons characterized by higher solar irradiance and among energy illiterate households with higher environmental awareness.

Keywords: Rebound effect, solar panels, electricity consumption, renewable energy

JEL Classification: D12, Q40, R20

Suggested Citation

Aydin, Erdal and Brounen, Dirk and Ergun, Ahmet, The Rebound Effect of Solar Panel Adoption: Evidence from Dutch Households (May 10, 2022). Available at SSRN: https://ssrn.com/abstract=4105144 or http://dx.doi.org/10.2139/ssrn.4105144

Erdal Aydin (Contact Author)

Sabanci University - Sabanci University ( email )

Orhanli
Estambul, Tuzla 34956
Turkey

Dirk Brounen

Tilburg University

P.O. Box 90153
Tilburg, DC Noord-Brabant 5000 LE
Netherlands

Ahmet Ergun

University of Virginia ( email )

1400 University Ave
Charlottesville, VA 22903
United States

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