We estimate the impact of utility cash rebates on the market share of ENERGY STAR appliances by exploiting the variation in timing and size of rebates across US states. We find that a dollar increase in the (population) weighted utility rebate raises the share of ENERGY STAR qualified clothes washers by 0.4%, but does not affect dishwasher and refrigerator shares. Using information on energy saved by an ENERGY STAR appliance and assuming a redemption rate of 40%, the cost per tonne of carbon saved is about $140 for the clothes washers rebate program. The corresponding cost of a megawatt hour saved (about $28) is lower than the estimated cost of building and operating an additional power plant and the average on-peak spot price. We conclude that ENERGY STAR clothes washers rebate program is, on average, a cost-effective way for utilities to reduce electricity demand.

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Università della Svizzera italiana Terms of use: Documents in July, 2014AbstractIn this paper we estimate the long-and short-run price elasticities of residential electricity consumption in Switzerland from a household survey by constructing an index of the stock of household appliances as well as by using energy services. We create the index by aggregating the information on the major household appliances. The index is used to estimate the impact of appliances on residential electricity demand. Furthermore, we also use energy services to estimate the electricity demand. We adopt an instrumental variables approach to obtain consistent estimates of the price elasticity to account for potential endogeneity concerns with the average price as well as the appliance index. Our results suggest that the price elasticity is around -0.6. We conclude that Swiss households are price inelastic in electricity prices. This can be used for policy makers as well as by utility companies to design pricing instruments to modify electricity consumption. We also find that estimates of the electricity demand when we substitute the usual residential characteristics with energy services are quite comparable.Keywords: Residential electricity, appliance stock index, energy services, instrumental variables. JEL Classification Codes: D, D1, Q, Q4, Q5. * We are grateful to the Bundesamt für Energie (Swiss Federal Office of Energy) for financial support. We would also like to thank the Verband der Schweizerischen Elektrizitätsunternehmen for providing us with the household survey data. Furthermore, we would like to thank Jürg Nipkow from the Schweizerische Agentur für Energie Effizienz and Stefan Rüesch from Comparis.ch AG for providing us with additional data. We would like to thank seminar participants at

We estimate the short-and long-run elasticity of electricity demand for Switzerland using a dynamic model of residential electricity consumption incorporating a correction introduced by Kiviet. We find that the short-run elasticity of residential demand for electricity in Switzerland is around-0.3 while the long-run elasticity is around-0.6. Our estimates indicate that pricing policy as a plan for energy strategy may have a moderate impact on residential customers in the short run but will have a stronger influence in the long-run. In view of the recent proposal in Switzerland to introduce a tax on electricity as part of its energy strategy plan, an increase in the price of electricity may result in a moderate decrease in electricity consumption.