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On the Economics of Residential Solar PV: An Evaluation of Subsidies, Savings, and Benefits

Author

Listed:
  • Linde Kattenberg
  • Erdal Aydin
  • Dirk Brounen
  • Nils Kok

Abstract

Using a natural experimental setting where a solar PV subsidy is assigned randomly to applying households, we estimate the impact of subsidy provision on the adoption of solar PV, installed capacity, timing of the adoption and energy consumption. The results imply that the provision of subsidy leads to an 11.9 percent increase in the probability of adopting solar PV among the households who applied for the subsidy. The findings also indicate that the households who are accepted to the subsidy program invest in an 8.9 percent larger installation as compared to rejected households, and adopt solar panels 55.9 percent faster. Finally, examining the subsequent electricity consumption of the applicants, we report that subsidy provision leads to a 3.74 percent decrease in households' electricity consumption as compared to the rejected applicant group after 1 year, and a 3.93 percent decrease after 5 years.

Suggested Citation

  • Linde Kattenberg & Erdal Aydin & Dirk Brounen & Nils Kok, 2022. "On the Economics of Residential Solar PV: An Evaluation of Subsidies, Savings, and Benefits," ERES 2022_141, European Real Estate Society (ERES).
    • Handle: RePEc:arz:wpaper:2022_141
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    More about this item

    Keywords

    natural experiment; Residential Sector; solar PV; subsidy program;
    All these keywords.

    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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