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Household Response to Incentive Payments for Load Shifting: A Japanese Time-of-Day Electricity Pricing Experiment

We measure the effect of incentive payments on residential time-of-day (TOD) electricity demand in summer, using data from a residential TOD electricity pricing experiment in the Kyushu region of southern Japan. During the experiment, participating households could receive incentive payments if they reduce their peak usage share. Results based on an econometric model indicate that households have shifted their electricity usage from peak to off-peak periods in response to the incentive payment, but the effect of the incentive payment on load shifting was modest.

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Energy Specializations: Energy Modeling – Energy Data, Modeling, and Policy Analysis; Electricity – Markets and Prices ; Electricity – Policy and Regulation

JEL Codes:
E61 - Policy Objectives; Policy Designs and Consistency; Policy Coordination
D42 - Market Structure, Pricing, and Design: Monopoly
E60 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook: General

Keywords: Electric utilities, Load shifting, energy conservation, Time of Day (TOD) pricing, Energy use

DOI: 10.5547/ISSN0195-6574-EJ-Vol21-No1-3

Published in Volume21, Number 1 of The Quarterly Journal of the IAEE's Energy Economics Education Foundation.