The impact of solar PV installation on household electricity demand in Australia

Kenta Tanaka, Clevo Wilson and Shunsuke Managi

Chapter 1 in A Modern Guide to Energy Economics, 2024, pp 5-27 from Edward Elgar Publishing

Abstract: The aim of this chapter is to explore the impact of solar PV diffusion on household electricity use behavior. To discuss the behavior changes, this chapter using Australian Bureau of Statistics (ABS) household survey data collected between 2012 and 2014 as a case study analyze how solar PV installation influence electricity behavior. We analyze cumulative survey data and seasonal electricity use data to understand consumers’ behavior in detail. Additionally, we estimate the elasticity of household electricity demand while controlling endogeneity and sample bias problems caused by household decision making regarding solar PV installation using the matching method. Our results imply that solar PV installation critically affects the elasticity of household electricity demand. Based on our findings and recent literature on solar PV systems and the energy market, we discuss how to consider the impact of solar PV systems on actual policy making and future academic studies. Based on our case study and review of the extant literature we conclude that policymakers need to be more cognizant of electricity use behavior of households with solar PV systems and the impact seasonal weather change.

Keywords: Economics and Finance; Environment (search for similar items in EconPapers)
Date: 2024
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