Do green electricity tariffs increase household electricity consumption?

Joachim Schleich, Johannes Schuler, Matthias Pfaff and Regine Frank

Applied Economics, 2023, vol. 55, issue 20, 2337-2348

Abstract: In this paper we investigate whether households change electricity consumption after they switch to a green electricity tariff. Using metered data of household electricity consumption from a large provider of green electricity in Germany, our quasi-experimental analysis finds that household switching to a green tariff leads to a non-monetary renewable rebound effect of around 7.7%. Further, our findings imply that this renewable rebound effect is persistent over at least four years. These findings are observationally consistent with moral licencing effects which induce households to permanently change their habitual behaviours and/or to acquire additional electricity-consuming technologies. Thus, failure to account for a renewable rebound in policy evaluation may lead to systematically underestimate the costs of achieving energy and climate targets.

Date: 2023
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DOI: 10.1080/00036846.2022.2102574

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