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Returns to Solar Panels in the Housing Market: A Meta Learner Approach

Author

Listed:
  • Elias Asproudis

    (Swansea University)

  • Cigdem Gedikli

    (Swansea University)

  • Oleksandr Talavera

    (University of Birmingham)

  • Okan Yilmaz

    (Swansea University)

Abstract

This paper aims to estimate the returns to solar panels in the UK residential housing market. Our analysis applies a causal machine learning approach to Zoopla property data containing about 5 million observations. Drawing on meta-learner algorithms, we provide strong evidence fortifying that solar panels are directly capitalized into sale prices. Our results point to a selling price premium above 6 percent (range between 6.2 percent to 6.9 percent depending on the meta-learner) associated with solar panels. Considering that the average selling price is 230,536 GBP in our sample, this corresponds to an additional 14,293 GBP to 15,906 GBP selling price premium for houses with solar panels. Our results are robust to traditional hedonic pricing models and matching techniques.

Suggested Citation

  • Elias Asproudis & Cigdem Gedikli & Oleksandr Talavera & Okan Yilmaz, 2023. "Returns to Solar Panels in the Housing Market: A Meta Learner Approach," Discussion Papers 23-01, Department of Economics, University of Birmingham.
    • Handle: RePEc:bir:birmec:23-01
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    More about this item

    Keywords

    solar panels; residential housing market; sale prices; machine-learning; meta-learners;
    All these keywords.

    JEL classification:

    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics

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