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Solar rebound: The unintended consequences of subsidies

Nicolas Boccard () and Axel Gautier

Energy Economics, 2021, vol. 100, issue C

Abstract: Many jurisdictions use net metering to record power exchanges between residential solar photovoltaic (PV) panels and the grid, thus valuing solar power at the electricity retail rate. However, if over the billing period, production exceeds consumption, the surplus remains freely available for consumption. In Wallonia (Belgium), the combination of net metering and generous subsidies for rooftop PV installation encouraged households to set-up large systems, possibly exceeding their consumption needs. We test this potential rebound effect with a large sample of residential PV installations. We observe that a large proportion of households oversize their installation to benefit from the subsidies and, later consume most of their excess production. The effect is econometrically highly significant. There is thus evidence of a strong increase in energy consumption by residential PV owners, which runs counter to the original policy design.

Keywords: Rebound effect; Solar PV; Net metering (search for similar items in EconPapers)
Date: 2021
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Working Paper: Solar rebound: the unintended consequences of subsidies (2020) Downloads
Working Paper: Solar Rebound - The Unintended Consequences of Subsidies (2019) Downloads
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DOI: 10.1016/j.eneco.2021.105334

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Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant

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