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House of the rising sun: The effect of utility-scale solar arrays on housing prices

Author

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  • Gaur, Vasundhara
  • Lang, Corey

Abstract

While utility-scale solar energy is important for reducing dependence on fossil fuels, solar arrays use significant amounts of land (about 5 acres per MW of capacity) and may create local land use disamenities. This paper seeks to quantify the externalities from nearby solar arrays using the hedonic method. We study the states of Massachusetts and Rhode Island, which have high population densities and ambitious renewable energy goals. Using difference-in-differences, repeat sales identification strategies, results suggest that houses within 0.6 miles depreciate 1.5–3.6% following construction of a solar array. However, additional analysis reveals that this average effect is primarily driven by solar developments on farm and forest lands and in rural areas, which is intuitive given the composite impact of solar, loss of open space, and loss of rural character. For these states, the local disamenities are the same order of magnitude as the global benefits of abated carbon emissions, which helps explain local opposition to siting.

Suggested Citation

  • Gaur, Vasundhara & Lang, Corey, 2023. "House of the rising sun: The effect of utility-scale solar arrays on housing prices," Energy Economics, Elsevier, vol. 122(C).
    • Handle: RePEc:eee:eneeco:v:122:y:2023:i:c:s0140988323001974
    DOI: 10.1016/j.eneco.2023.106699
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    Citations

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    Cited by:

    1. Dong, Luran & Gaur, Vasundhara & Lang, Corey, 2023. "Property value impacts of onshore wind energy in New England: The importance of spatial heterogeneity and temporal dynamics," Energy Policy, Elsevier, vol. 179(C).
    2. Bilbao-Terol, Amelia & Bilbao-Terol, Celia, 2024. "The Choquet integral supported by a hedonic approach for modelling preferences in hotel selection," Omega, Elsevier, vol. 122(C).
    3. Tang, Cheng Keat & Gibbons, Stephen, 2024. "Are friends electric? Valuing the social costs of power lines using house prices," Energy Economics, Elsevier, vol. 134(C).
    4. Zander, Kerstin K. & Mathur, Deepika & Mathew, Supriya & Garnett, Stephen T., 2024. "Public views about the world's largest proposed solar farm in remote Australia," Energy Policy, Elsevier, vol. 191(C).

    More about this item

    Keywords

    Solar energy; Utility-scale solar; Hedonic valuation; Difference-in-differences;
    All these keywords.

    JEL classification:

    • Q24 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Land
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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