In order to contribute to an understanding of the impact of the so called ‘solar-rebound effect’ (SRE) as described by Oliver et al. (2019), it is the goal of this paper to formulate a hypothesis regarding the potential impact of partial electricity retail price (ERP) feed-in-tariffs (FiT) on this effect in Germany, drawing on the theoretical model developed by Oliver alii (2019) and on empirical insights regarding the SRE, observed in Phoenix (Arizona) by Qiu alii (2019) and in Sydney by Deng & Newton (2017).
Therefore, the research question that I would like to answer in the following argumentation, is: Has the policy measure of the Renewable Energy Sources Act (EEG) feed-in tariff scheme an impact on the solar-rebound effect in Germany, and does the mechanism mitigate or intensify the SRE compared to solar rebound effects observed in Arizona by Qiu et al. (2019) and in Australia by Deng & Newton (2017)?
In Germany, there are a variety of different legal mechanisms applied to support the installation and usage of renewable energy. The most important one being the Renewable Energy Sources Act (EEG) which is widely acknowledged and adopted as a model by other countries. The regulation led to an increase of the portion of renewable energy on total gross electricity consumption in Germany from 2009 to 2019. In 2019 renewables had a share of 43% on gross electricity consumption, of which 8.2% were generated by solar systems. Approximately 1/3 of the total amount of photovoltaic (PV) power production capacity in Germany is owned by private households, which are acting as prosumers. These numbers underscore the importance to understand effects on residential photovoltaic system usage to implement effective policies in line with climate objectives.
Table of Contents
1. Introduction and motivation
2. Research question
3. Microeconomic theoretical background
3.1. Rebound effects
3.2. Microeconomic foundation
3.3. Impact of different schemes on the solar-rebound effect
3.3.1. Net-metering
3.3.2. Gross-metering
4. Empirical evidence
4.1. Sydney (Gross-metering)
4.2. Phoenix (Net-metering)
4.3. Theory and Empirical evidence
5. The solar-rebound effect in Germany
5.1. Situation in Germany
5.2. Hypothesis
6. Discussion and Conclusion
Objectives and Research Themes
This paper aims to investigate the existence and potential magnitude of a "solar-rebound effect" (SRE) within the German energy landscape, specifically examining how current feed-in-tariff (FiT) policies influence household electricity consumption behavior compared to international case studies.
- Theoretical analysis of microeconomic models regarding utility maximization for solar prosumers.
- Comparative assessment of net-metering versus gross-metering policy frameworks.
- Evaluation of empirical data from Sydney and Phoenix to identify correlations between FiT/ERP ratios and rebound effects.
- Identification of the socio-economic and behavioral factors unique to the German residential solar market.
- Formulation of a hypothesis regarding the expected rebound impact based on Germany's specific FIT/ERP ratio.
Excerpt from the publication
3.1. Rebound effects
A very early definition of a rebound effect in the energy sector was given by William Stanley Jevons in 1865, who analyzed the consumption of coal and defined the rebound effect as “an increase in the energy usage after the introduction of a more efficient (energy saving) technology” (Boccard & Gautier 2019, p.3; Jevons 1856). This behavioral response can be caused by a substitution effect, if costly alternatives are replaced by the new technology and the relative price of energy changes, and/or due to an income effect, when the new technology leads to monetary savings for the households (Boccard & Gautier 2019). In this paper, including the idea of marginal costs, the rebound effect is defined as a “behavioral response whereby potential energy savings from efficiency improvements are partially offset by increased consumption of energy services, as the marginal cost of energy services is reduced” (Oliver et al. 2019, p.1). In other words, the installation of a solar system generating additional energy is likely to lead to an increase of energy consumption. This increase in consumption can be denoted in percentage of every kWh that is additionally generated.
An economy-wide indirect rebound effect that can be analyzed on a macroeconomic level will not be discussed in depth.
Summary of Chapters
1. Introduction and motivation: Outlines the political and environmental context of the energy transition, focusing on the role of photovoltaic energy in reaching EU climate goals.
2. Research question: Presents the central inquiry regarding the impact of the German Renewable Energy Sources Act (EEG) on the solar-rebound effect.
3. Microeconomic theoretical background: Defines the SRE using economic theory and explores how different metering schemes incentivize prosumer household energy consumption.
4. Empirical evidence: Analyzes real-world data from Sydney and Phoenix to characterize observed rebound effects under various tariff schemes.
5. The solar-rebound effect in Germany: Transposes the theoretical and empirical findings onto the German market to formulate a hypothesis based on current national policy.
6. Discussion and Conclusion: Critically evaluates the limitations of the analysis and suggests the necessity for further quantitative research accounting for non-monetary behavioral factors.
Keywords
Solar-rebound effect, Renewable Energy Sources Act, Feed-in-tariff, Gross-metering, Net-metering, Prosumers, Energy consumption, Economic theory, Utility maximization, Germany, Sustainability, Behavioral factors, Electricity market, Household efficiency, Photovoltaik
Frequently Asked Questions
What is the primary focus of this seminar paper?
The paper investigates whether households that install solar PV systems increase their electricity consumption—a phenomenon known as the "solar-rebound effect"—and how specific government-mandated feed-in-tariffs in Germany might influence this behavior.
What are the core thematic fields examined?
The work covers microeconomic theory, the impact of various metering schemes (net-metering vs. gross-metering), comparative empirical studies from Australia and the US, and the specific regulatory framework of the German EEG.
What is the primary research question?
The central question is whether the EEG's tariff scheme mitigates or intensifies the solar-rebound effect in Germany when compared to residential solar markets in Arizona and Australia.
Which scientific method is utilized?
The paper employs a comparative analysis approach, grounding its arguments in established microeconomic utility maximization models and contrasting them with existing empirical data from international studies.
What topics are covered in the main body?
The main body traverses the definition of rebound effects, the construction of a mathematical model for prosumer utility, a comparative review of empirical evidence from Sydney and Phoenix, and an application of these findings to the current German regulatory situation.
Which keywords best characterize this work?
Key terms include solar-rebound effect, EEG (Renewable Energy Sources Act), prosumers, feed-in-tariffs, electricity consumption, and utility maximization.
How does the FiT/ERP ratio influence the rebound effect?
The paper suggests a positive correlation: as the ratio of the feed-in-tariff to the electricity retail price increases, the incentive to consume more electricity—and thus the rebound effect—tends to increase.
Why might the rebound effect in Germany differ from cases in Phoenix or Sydney?
The paper emphasizes that behavioral and structural factors vary significantly between countries, such as the prevalence of electric air-conditioning in Phoenix versus heating-related energy needs in Germany, which limits the direct comparability of results.
- Arbeit zitieren
- Jonte Buchholz (Autor:in), 2020, Potential impact of partial retail price feed-in-tariffs on a solar rebound effect in Germany, München, GRIN Verlag, https://www.grin.com/document/1307993
