Microeconomics of the Solar Rebound under Net Metering
| Title: | Microeconomics of the Solar Rebound under Net Metering |
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| Format: | Journal Article |
| Publication Date: | 2025 |
| Published In: | Journal of the Association of Environmental & Resource Economists |
| Description: | Residential solar photovoltaics generate 'green' electricity, but may also lead to an increase in household electricity consumption---a phenomenon termed the 'solar rebound effect.’ This paper develops a theoretical framework for understanding the solar rebound. We show that the solar rebound is inherently linked to the net metering compensation a household faces. While the solar rebound is often simply a pure income effect, it can also include a substitution effect in some policy contexts. A negative solar rebound is even possible. We derive the welfare effects of the solar rebound and provide insights for econometric estimation. |
| Ivan Allen College Contributors: | |
| External Contributors: | Juan Moreno-Cruz, Kenneth T. Gillingham |
| Citation: | Oliver, M.E., Moreno-Cruz, J., & Gillingham, K., (2025). Microeconomics of the Solar Rebound under Net Metering. Journal of the Association of Environmental & Resource Economists. Forthcoming. |
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