IDEAS home Printed from https://ideas.repec.org/a/eee/appene/v253y2019ic14.html
   My bibliography  Save this article

Estimated electricity bill savings for residential solar photovoltaic system owners: Are they accurate enough?

Author

Listed:
  • Fikru, Mahelet G.

Abstract

Techno-economic models are widely used to estimate electricity bill savings attributable to residential solar photovoltaic systems. However, there are not many studies that examine whether estimated savings are actually realized or not. The objective of the study is to compare estimated savings with actual savings using statistical and econometric approaches of data analysis. Based on a sample of solar adopters located in the United States of America, this study finds that actual savings are on average 20% higher than estimated savings, but they are also relatively more spread out than estimated savings. One possible explanation for a lower estimated savings is the inability of models to fully capture favorable changes in household habits, the electric rate structure, and weather. Factors that are correlated with higher estimated savings are more technical (photovoltaic size-to-load ratio, floor area, and age of house) and do not necessarily matter for actual savings. Higher initial electricity bills are positively correlated with higher actual savings on average, but not with estimated savings. There is some room for making solar estimate models more customizable, indicating best and worst case scenarios depending on changes in household habits and exogenous factors. Finally, for the sample of solar adopters in this study, customers’ perception on savings is fairly correct in reflecting the deviation between actual and estimated savings.

Suggested Citation

  • Fikru, Mahelet G., 2019. "Estimated electricity bill savings for residential solar photovoltaic system owners: Are they accurate enough?," Applied Energy, Elsevier, vol. 253(C), pages 1-1.
    • Handle: RePEc:eee:appene:v:253:y:2019:i:c:14
    DOI: 10.1016/j.apenergy.2019.113501
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0306261919311754
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.apenergy.2019.113501?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Keirstead, James, 2007. "Behavioural responses to photovoltaic systems in the UK domestic sector," Energy Policy, Elsevier, vol. 35(8), pages 4128-4141, August.
    2. Darghouth, Naïm R. & Barbose, Galen & Wiser, Ryan H., 2014. "Customer-economics of residential photovoltaic systems (Part 1): The impact of high renewable energy penetrations on electricity bill savings with net metering," Energy Policy, Elsevier, vol. 67(C), pages 290-300.
    3. Kavousian, Amir & Rajagopal, Ram & Fischer, Martin, 2013. "Determinants of residential electricity consumption: Using smart meter data to examine the effect of climate, building characteristics, appliance stock, and occupants' behavior," Energy, Elsevier, vol. 55(C), pages 184-194.
    4. Hondo, Hiroki & Baba, Kenshi, 2010. "Socio-psychological impacts of the introduction of energy technologies: Change in environmental behavior of households with photovoltaic systems," Applied Energy, Elsevier, vol. 87(1), pages 229-235, January.
    5. Berry, Stephen & Davidson, Kathryn, 2016. "Improving the economics of building energy code change: A review of the inputs and assumptions of economic models," Renewable and Sustainable Energy Reviews, Elsevier, vol. 58(C), pages 157-166.
    6. Lee V. White & Nicole D. Sintov, 2018. "Inaccurate consumer perceptions of monetary savings in a demand-side response programme predict programme acceptance," Nature Energy, Nature, vol. 3(12), pages 1101-1108, December.
    7. Severin Borenstein, 2017. "Private Net Benefits of Residential Solar PV: The Role of Electricity Tariffs, Tax Incentives, and Rebates," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 4(S1), pages 85-122.
    8. Jones, Rory V. & Fuertes, Alba & Lomas, Kevin J., 2015. "The socio-economic, dwelling and appliance related factors affecting electricity consumption in domestic buildings," Renewable and Sustainable Energy Reviews, Elsevier, vol. 43(C), pages 901-917.
    9. Fikru, Mahelet G. & Gelles, Gregory & Ichim, Ana-Maria & Kimball, Jonathan W. & Smith, Joseph D. & Zawodniok, Maciej Jan, 2018. "An economic model for residential energy consumption, generation, storage and reliance on cleaner energy," Renewable Energy, Elsevier, vol. 119(C), pages 429-438.
    10. Darghouth, Naïm R. & Barbose, Galen & Wiser, Ryan, 2011. "The impact of rate design and net metering on the bill savings from distributed PV for residential customers in California," Energy Policy, Elsevier, vol. 39(9), pages 5243-5253, September.
    11. Luthander, Rasmus & Widén, Joakim & Nilsson, Daniel & Palm, Jenny, 2015. "Photovoltaic self-consumption in buildings: A review," Applied Energy, Elsevier, vol. 142(C), pages 80-94.
    12. Berry, Stephen & Whaley, David & Davidson, Kathryn & Saman, Wasim, 2014. "Do the numbers stack up? Lessons from a zero carbon housing estate," Renewable Energy, Elsevier, vol. 67(C), pages 80-89.
    13. Cai, Desmond W.H. & Adlakha, Sachin & Low, Steven H. & De Martini, Paul & Mani Chandy, K., 2013. "Impact of residential PV adoption on Retail Electricity Rates," Energy Policy, Elsevier, vol. 62(C), pages 830-843.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Chen, Jianhong & Zhang, Youlang & Li, Xinzhou & Sun, Bo & Liao, Qiangqiang & Tao, Yibin & Wang, Zhiqin, 2020. "Strategic integration of vehicle-to-home system with home distributed photovoltaic power generation in Shanghai," Applied Energy, Elsevier, vol. 263(C).
    2. Gong, Yuanchao & Cai, Bo-feng & Sun, Yan, 2020. "Perceived fiscal subsidy predicts rural residential acceptance of clean heating: Evidence from an indoor-survey in a pilot city in China," Energy Policy, Elsevier, vol. 144(C).
    3. Luigi Dolores & Maria Macchiaroli & Gianluigi De Mare, 2022. "Financial Impacts of the Energy Transition in Housing," Sustainability, MDPI, vol. 14(9), pages 1-17, April.
    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. Gao, Xue & Zhou, Shan, 2022. "Solar adoption inequality in the U.S.: Trend, magnitude, and solar justice policies," Energy Policy, Elsevier, vol. 169(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Fikru, Mahelet G., 2019. "Electricity bill savings and the role of energy efficiency improvements: A case study of residential solar adopters in the USA," Renewable and Sustainable Energy Reviews, Elsevier, vol. 106(C), pages 124-132.
    2. Fikru, Mahelet G., 2020. "Determinants of electricity bill savings for residential solar panel adopters in the U.S.: A multilevel modeling approach," Energy Policy, Elsevier, vol. 139(C).
    3. Kubli, Merla, 2018. "Squaring the sunny circle? On balancing distributive justice of power grid costs and incentives for solar prosumers," Energy Policy, Elsevier, vol. 114(C), pages 173-188.
    4. Ahmed S. Alahmed & Lang Tong, 2022. "Integrating Distributed Energy Resources: Optimal Prosumer Decisions and Impacts of Net Metering Tariffs," Papers 2204.06115, arXiv.org, revised May 2022.
    5. Castaneda, Monica & Jimenez, Maritza & Zapata, Sebastian & Franco, Carlos J. & Dyner, Isaac, 2017. "Myths and facts of the utility death spiral," Energy Policy, Elsevier, vol. 110(C), pages 105-116.
    6. Axel Gautier & Julien Jacqmin & Jean-Christophe Poudou, 2018. "The prosumers and the grid," Journal of Regulatory Economics, Springer, vol. 53(1), pages 100-126, February.
    7. Wittenberg, Inga & Matthies, Ellen, 2018. "How do PV households use their PV system and how is this related to their energy use?," Renewable Energy, Elsevier, vol. 122(C), pages 291-300.
    8. L. (Lisa B.) Ryan & Sarah La Monaca & Linda Mastrandrea & Petr Spodniak, 2018. "Harnessing Electricity Retail Tariffs to Support Climate Change Policy," Working Papers 201822, School of Economics, University College Dublin.
    9. Darghouth, Naïm R. & Wiser, Ryan H. & Barbose, Galen & Mills, Andrew D., 2016. "Net metering and market feedback loops: Exploring the impact of retail rate design on distributed PV deployment," Applied Energy, Elsevier, vol. 162(C), pages 713-722.
    10. Moncada, J.A. & Tao, Z. & Valkering, P. & Meinke-Hubeny, F. & Delarue, E., 2021. "Influence of distribution tariff structures and peer effects on the adoption of distributed energy resources," Applied Energy, Elsevier, vol. 298(C).
    11. David P. Brown & David E. M. Sappington, 2017. "Optimal policies to promote efficient distributed generation of electricity," Journal of Regulatory Economics, Springer, vol. 52(2), pages 159-188, October.
    12. Heleno, Miguel & Sehloff, David & Coelho, Antonio & Valenzuela, Alan, 2020. "Probabilistic impact of electricity tariffs on distribution grids considering adoption of solar and storage technologies," Applied Energy, Elsevier, vol. 279(C).
    13. David P. Brown & David E.M. Sappington, 2017. "Designing Compensation for Distributed Solar Generation: Is Net Metering Ever Optimal?," The Energy Journal, , vol. 38(3), pages 1-32, May.
    14. Roberts, Mike B. & Haghdadi, Navid & Bruce, Anna & MacGill, Iain, 2019. "Characterisation of Australian apartment electricity demand and its implications for low-carbon cities," Energy, Elsevier, vol. 180(C), pages 242-257.
    15. Małgorzata Sztorc, 2022. "The Implementation of the European Green Deal Strategy as a Challenge for Energy Management in the Face of the COVID-19 Pandemic," Energies, MDPI, vol. 15(7), pages 1-21, April.
    16. Brown, David P. & Muehlenbachs, Lucija, 2023. "The Value of Electricity Reliability: Evidence from Battery Adoption," Working Papers 2023-5, University of Alberta, Department of Economics, revised 26 Jul 2024.
    17. Kettani, Maryème & Sanin, Maria Eugenia, 2024. "Energy consumption and energy poverty in Morocco," Energy Policy, Elsevier, vol. 185(C).
    18. Yildiz, B. & Bilbao, J.I. & Dore, J. & Sproul, A.B., 2017. "Recent advances in the analysis of residential electricity consumption and applications of smart meter data," Applied Energy, Elsevier, vol. 208(C), pages 402-427.
    19. Cohen, Jed & Azarova, Valeriya & Kollmann, Andrea & Reichl, Johannes, 2019. "Q-complementarity in household adoption of photovoltaics and electricity-intensive goods: The case of electric vehicles," Energy Economics, Elsevier, vol. 83(C), pages 567-577.
    20. Mustain Billah & Adnan Anwar & Ziaur Rahman & Syed Md. Galib, 2021. "Bi-Level Poisoning Attack Model and Countermeasure for Appliance Consumption Data of Smart Homes," Energies, MDPI, vol. 14(13), pages 1-17, June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:appene:v:253:y:2019:i:c:14. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/405891/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.