The Value of Electricity Reliability: Evidence from Battery Adoption

David B. Brown and Lucija Muehlenbachs

No 23-10, RFF Working Paper Series from Resources for the Future

Abstract: To avoid electric-infrastructure-induced wildfires, millions of Californians have had their power cut for hours to days at a time. We show that rooftop solar-plus-battery-storage systems increased in zip codes with the longest power outages. Rooftop solar panels alone will not help a household avert outages, but a solar-plus-battery-storage system will. Using this fact, we obtain a revealed-preference estimate of the willingness to pay for electricity reliability, the Value of Lost Load, a key parameter for electricity market design. Our estimate, of around $4,300/MWh, suggests California's wildfires-prevention outages resulted in losses from foregone consumption of $322 million to residential electricity consumers.

Date: 2023-04-18
New Economics Papers: this item is included in nep-dcm, nep-ene, nep-reg and nep-res
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Citations: View citations in EconPapers (1)

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Working Paper: The Value of Electricity Reliability: Evidence from Battery Adoption (2024)
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