Magnitude and decomposition of the solar rebound: Evidence from Swiss households

Abstract

This paper examines rebound effects in electricity consumption induced by solar photovoltaic (PV) adoption using detailed panel data of 58,104 single-family home residents (2008–2019) in Switzerland. I find that solar PV adoption increases a household’s electricity consumption by approximately 8 %–11 %, depending on specification. Part of this increase is driven by households switching to electric technologies, such as electric vehicles, as shown by a decomposition of the rebound effect using machine learning predicted counterfactual consumption. The solar rebound effect is mainly driven by a subsample of households that install relatively large installations and substantially adjust their consumption patterns. In contrast, more price-sensitive consumers and households that co-adopt battery storage show smaller increases in electricity usage. These findings have important implications for the evaluation of solar PV subsidies, the planning of future energy system capacity, as well as the environmental implications of solar rebound effects.