Tipping the scale: Why utility-scale solar avoids a solar rebound and what it means for U.S. solar policy

Abstract

Adoption of residential rooftop photovoltaic (PV) systems is increasingly widespread. However, empirical evidence shows that households who adopt rooftop PV increase total electricity consumption, a response known as the ‘solar rebound effect’ (SRE). The SRE implies that rooftop PV generation displaces conventional, grid-supplied electricity—still overwhelmingly generated by fossil fuel combustion—on a less than one-for-one basis. This article argues that utility-scale solar avoids a SRE because the SRE emerges as a household’s response to the self-generation of electricity by its rooftop PV system, which changes its electricity consumption incentives in ways that utility-scale solar does not. By avoiding a SRE, utility-scale solar allows the carbon reduction potential of increased PV generation capacity to be more fully realized, which has important implications for U.S. solar policy.