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Do time-of-use prices deliver energy savings at the right time?

Author

Listed:
  • Fu, Zheng
  • Novan, Kevin
  • Smith, Aaron

Abstract

Time-of-use (TOU) electricity prices are increasingly being adopted to reduce consumption during the higher marginal cost afternoon hours. There is ample evidence that TOU rates reduce average consumption during the peak price hours of the day, but it is unknown how these energy savings are distributed across days. Using a unique dataset from households with smart thermostats, we find that adopting TOU rates causes large decreases in peak period AC usage, resulting in energy savings that are concentrated on the hottest, highest demand days when the benefits of conservation are the greatest.

Suggested Citation

  • Fu, Zheng & Novan, Kevin & Smith, Aaron, 2024. "Do time-of-use prices deliver energy savings at the right time?," Journal of Environmental Economics and Management, Elsevier, vol. 128(C).
    • Handle: RePEc:eee:jeeman:v:128:y:2024:i:c:s0095069624001281
    DOI: 10.1016/j.jeem.2024.103054
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    More about this item

    JEL classification:

    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

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