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Photovoltaics and the solar rebound: Evidence for Germany

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  • Frondel, Manuel
  • Kaestner, Kathrin
  • Sommer, Stephan
  • Vance, Colin

Abstract

Recent research suggests that households increase their electricity consumption in the aftermath of installing photovoltaic (PV) panels, a behavioral change commonly referred to as the solar rebound. Drawing on panel data originating from the German Residential Energy Consumption Survey (GRECS), we employ panel estimation methods and the dynamic system estimator developed by Blundell and Bond (1998) to investigate the existence of a solar rebound effect, thereby accounting for simultaneity and endogeneity issues relating to PV installation and the electricity price. Our empirical results suggest that PV panel adoption of households does not change the amount of electricity taken from the grid. As we derive theoretically, this outcome implies a solar rebound that is bounded from above by about 50%, while back-of-the-envelope calculations provide us with a lower bound of 12% and an average solar rebound of 35%.

Suggested Citation

  • Frondel, Manuel & Kaestner, Kathrin & Sommer, Stephan & Vance, Colin, 2022. "Photovoltaics and the solar rebound: Evidence for Germany," Ruhr Economic Papers 954, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    • Handle: RePEc:zbw:rwirep:954
    DOI: 10.4419/96973118
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    Cited by:

    1. Atasoy, Ayse Tugba & Schmitz, Hendrik & Madlener, Reinhard, 2021. "Mechanisms for Rebound Effects of Solar Electricity Prosuming in Germany," FCN Working Papers 10/2021, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN), revised 01 Jun 2023.

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    More about this item

    Keywords

    Feed-in tariffs; GMM system estimator; German Residential Energy Consumption Survey (GRECS);
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • H10 - Public Economics - - Structure and Scope of Government - - - General
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

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