In May, Assistant Professor Yueming "Lucy" Qiu presented a seminar at the Environmental Protection Agency (EPA) National Center for Environmental Economics in Washington, DC. During her seminar, Qiu focused her remarks on the topic of Time-Of-Use (TOU) electricity and its impact on residential energy efficiency and solar panel adoption.
“Energy efficiency and solar energy are two measures promoted by policy makers to reduce residential energy consumption and the associated greenhouse gas emissions,” Qiu says. “Not surprisingly, various policies and financial incentives (e.g., tax credits, direct rebates, etc.) exist to encourage the adoption of these technologies. Yet these measures are almost never revenue neutral from a fiscal policy perspective and always face the question of whether the cost justifies the gain.”
Qiu’s research shows empirical evidence of the impact of TOU electricity pricing. She goes through a theoretical model to show that TOU customers have a larger incentive to adopt new technologies compared to customers on non-dynamic pricing plans.
In her paper, co-authored with SPP PhD student Jing Liang, Qiu uses household-level data from Phoenix, Arizona from an appliance saturation survey of customers that was conducted by a major electric utility. She says the empirical data shows that TOU customers are 27 percent more likely to install solar panels, but not more likely to adopt energy-efficient air conditioning.
“The findings highlight that TOU can act as a cost-effective policy instrument to facilitate solar panel adoption, compared to other more costly instruments with a similar magnitude of impacts such as tax credits or rebates of $2,070~$10,472,” Qiu adds.
The study is part of Qiu’s National Science Foundation project on residential clean energy adoption and evaluation. She says, “Delivering the seminar at EPA helped us gain valuable feedback on the paper from leading environmental researchers and practitioners.”