Paying attention to impacts of behavioral factor on energy efficiency (EE) investments, this study attempts to identify preference characteristics affecting EE investments. We model households’ EE investments with time, risk, and social preferences, conduct a survey, and empirically examine the effects of the preference characteristics on home energy retrofit decisions in Korea. We find that the research hypotheses for risk and social preferences that we are derived from the model are supported while those for time preference are partially supported. The results are summarized as follows. First, respondents who discount the future more heavily are less likely to plan a home energy retrofit. Second, very risk-averse respondents are less likely to have experienced a home energy retrofit and very risk-seeking ones are more likely to plan a home energy retrofit. Third, those seriously concerned about environmental issues or who strongly respond to moral norms are likely to have experienced or plan a home energy retrofit.

This paper estimates the residential solar PV rebound effect in South Korea and examines its implications for consumer surplus and environmental benefits. Using household-level billing records and hourly electricity consumption data from Jeju Island, we apply matching and machine learning estimators to construct flexible counterfactual benchmarks for household electricity consumption in the absence of solar PV adoption. South Korea provides an informative setting because increasing block pricing (IBP) and net metering operate jointly, allowing solar PV generation to reduce grid electricity purchases and move households to lower positions within the IBP schedule. The preferred estimates show that rebound consumption amounts to 109.97 kWh per household per month, equivalent to 18% of estimated counterfactual consumption and 38% of gross solar PV generation. Rebound is substantially larger among solar households whose solar PV generation moves them into lower tariff blocks, suggesting that reductions in bill burdens and effective average electricity prices are important mechanisms underlying household behavioral responses. The analysis shows that residential solar PV adoption generates substantial consumer surplus gains through electricity bill savings, while rebound offsets approximately 45% of the potential environmental benefits. These results indicate that the consequences of residential solar PV policies depend not only on solar PV generation itself, but also on the tariff and compensation structures that shape household electricity consumption after adoption.

This paper estimates the residential solar PV rebound effect in South Korea and examines its implications for consumer surplus and environmental benefits. Using household-level billing records and hourly electricity consumption data from Jeju Island, we apply matching and machine learning estimators to construct flexible counterfactual benchmarks for household electricity consumption in the absence of solar PV adoption. South Korea provides an informative setting because increasing block pricing (IBP) and net metering operate jointly, allowing solar PV generation to reduce grid electricity purchases and move households to lower positions within the IBP schedule. The preferred estimates show that rebound consumption amounts to 109.97 kWh per household per month, equivalent to 18% of estimated counterfactual consumption and 38% of gross solar PV generation. Rebound is substantially larger among solar households whose solar PV generation moves them into lower tariff blocks, suggesting that reductions in bill burdens and effective average electricity prices are important mechanisms underlying household behavioral responses. The analysis shows that residential solar PV adoption generates substantial consumer surplus gains through electricity bill savings, while rebound offsets approximately 45% of the potential environmental benefits. These results indicate that the consequences of residential solar PV policies depend not only on solar PV generation itself, but also on the tariff and compensation structures that shape household electricity consumption after adoption.

Household responses to TOU tariffs are weak under voluntary participation. • Income effects offset substitution effects when households expect bill savings • Voluntary tariff adoption can increase electricity consumption. • Household load profiles shape responses to time-of-use pricing.