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Residential Substitution of Off-peak for Peak Electricity Usage under Time-of-Use Pricing

Douglas W. Caves and Laurits R. Christensen

Year: 1980
Volume: Volume 1
Number: Number 2
DOI: 10.5547/ISSN0195-6574-EJ-Vol1-No2-4
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Abstract:
This article reports on the methodology, procedures, and conclusions from the first phase of our econometric analysis of the Wisconsin Time-of-Use (TOU) Electricity Pricing Experiment.' Dur-ing Phase I, which took place during the summers of 1976 and 1977, we confined our attention to assessing consumer ability and/or willingness to shift electricity usage from peak to off-peak (P/OP)



Swiss Residential Demand for Electricity by Time-of-Use: An Application of the Almost Ideal Demand System

Massimo Filippini

Year: 1995
Volume: Volume16
Number: Number 1
DOI: 10.5547/ISSN0195-6574-EJ-Vol16-No1-2
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Abstract:
This study examines the residential demand for electricity by time-of-use in Switzerland. For this purpose, an almost ideal demand system (AIDS) model for peak and off-peak electricity consumption is estimated using panel data coveting the years 1987 to 1990 and 21 cities. The empirical analysis characterizes the Swiss residential electricity market as rather price responsive. The own partial price elasticities are estimated to range between -1.29 and -1.50 during the peak period and between -2.36 and -2.42 during the off-peak period. These elasticities show a high responsiveness of electricity consumption to changes in peak and off-peak prices. Moreover, the positive values of the partial cross price elasticities and substitution elasticities show that peak and offpeak electricity are substitutes.



The Bias in Price Elasticity Estimates Under Separability Between Electricity and Labor in Studies of Time-of-Use Electricity

Asher Tishler

Year: 1998
Volume: Volume19
Number: Number 2
DOI: 10.5547/ISSN0195-6574-EJ-Vol19-No2-13
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Abstract:
Most time-of-use(TOU) studies of electricity use in the business sector have found little overall response, as measured by price elasticities, to TOU rates. These studies employed the assumption of weak separability between electricity and all other inputs. Here, we use the generalized Leontief cost function to show that when labor is included in the estimation, the electricity price elasticities are larger, in absolute values, than when labor is erroneously excluded. This result is demonstrated with data on electricity and labor for about 400 Israeli business customers. We also show that the omission of labor from the estimation may cause serious underestimation of the net welfare gains that result from changing a flat electricity price to a TOU rate.



The Long-Run Efficiency of Real-Time Electricity Pricing

Severin Borenstein

Year: 2005
Volume: Volume 26
Number: Number 3
DOI: 10.5547/ISSN0195-6574-EJ-Vol26-No3-5
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Abstract:
Retail real-time pricing (RTP) of electricity � retail pricing that changes hourly to reflect the changing supply/demand balance � is very appealing to economists because it �sends the right price signals.� Economic efficiency gains from RTP, however, are often confused with the short-term wealth transfers from producers to consumers that RTP can create. Abstracting from transfers, I focus on the long-run efficiency gains from adopting RTP in a competitive electricity market. Using simple simulations with realistic parameters, I demonstrate that the magnitude of efficiency gains from RTP is likely to be significant even if demand shows very little elasticity. I also show that �time-of-use� pricing, a simple peak and off-peak pricing system, is likely to capture a very small share of the efficiency gains that RTP offers.



Time-of-Use Electricity Pricing and Residential Low-carbon Energy Technology Adoption

Jing Liang, Pengfei Liu, Yueming Qiu, Yi David Wang, and Bo Xing

Year: 2020
Volume: Volume 41
Number: Number 3
DOI: 10.5547/01956574.41.2.jlia
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Abstract:
This paper provides the first empirical evidence on the correlation between Time-Of-Use (TOU) electricity pricing and the adoption of energy efficient appliances and solar panels. We use household-level data in Phoenix, Arizona from an appliance saturation survey of about 16,000 customers conducted by a major electric utility. Our empirical results show that TOU consumers are associated with 27% higher likelihood to install solar panels but not more likely to adopt energy-efficient air conditioning based on the propensity score matching and coarsened exact matching methods. The findings highlight that policy makers could combine TOU and solar panels when implementing educational programs or when giving out financial incentives to consumers. Our results imply that TOU is associated with a similar impact of the incentive offered by $2,070~$10,472 tax credits or rebates on solar adoption.





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