Distance and intensity effects of renewable energy on property prices: A hedonic price analysis for Germany

Felix Heuer and Stephan Sommer

No 1143, Ruhr Economic Papers from RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen

Abstract: Huge low-carbon investments are required to reach the goals of the Paris Agreement. However, one obstacle for these investments may be public opposition to the installment of low-carbon technology due to high perceived net costs. In this paper, we analyze the local net costs of both wind turbines and PV farms, employing a hedonic price analysis on the universe of housing ads from German's largest online real estate platform for the period spanning from 2009 to 2021. Beyond estimating average treatment effects, we focus on distance and intensity specific effects of wind turbines and PV farms on property prices. Moreover, we add to the existing literature by estimating the effect not only of the nearest energy facility. We find that wind turbines exhibit a negative effect of 1.8-1.9% on property prices that fades out after 3 km of distance. This effect seems to become larger the more wind turbines are installed in the proximity of a property. PV farms reduce property prices more locally only up to a 2 km distance by 1.9%.

Keywords: Renewable energy; hedonic prices; heterogeneity (search for similar items in EconPapers)
JEL-codes: D12 Q21 R31 (search for similar items in EconPapers)
Date: 2025
New Economics Papers: this item is included in nep-eur
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:rwirep:319072

DOI: 10.4419/96973326

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