Quantifying the Solar Rebound with Smart Meter Data: The Role of Co-Adoptions
Abstract
This paper quantifies the solar rebound effect—the change in household electricity consumption following the installation of rooftop solar panels—using hourly smart meter data from Spain. We develop a structural model that accounts for the censoring of net consumption when solar generation exceeds household demand, estimating the rebound using simulated method of moments. Our approach imputes solar production from panel capacity and irradiance data, constructs household-specific consumption counterfactuals from pre-installation behavior, and identifies the rebound from variation in the censoring margin. Beyond the intensive margin, we explore the extensive margin of the rebound by developing algorithms to detect co-adoption of electricity-intensive technologies, particularly electric heating and cooling systems. Using data from approximately 287 solar households and 2,000 non-solar households served by a Spanish retailer between 2021 and 2023, we find that while air conditioning prevalence is similar across solar and non-solar adopters, electric heating detection raises important measurement challenges. Our findings highlight that disentangling the intensive rebound from co-adoption of complementary electric technologies is critical for accurately assessing the emissions reduction benefits of residential solar and for designing efficient energy policies.