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Effects of rooftop solar on housing prices in Australia

Author

Listed:
  • Rohan Best

    (Department of Economics, Macquarie University)

  • Paul J. Burke

    (Crawford School of Public Policy, Australian National University)

  • Rabindra Nepal

    (School of Business, Faculty of Business and Law, University of Wollongong)

  • Zac Reynolds

    (Department of Economics, Macquarie University)

Abstract
Hedonic models of housing prices face the risk of omitted variable bias due to the challenge of controlling for all relevant property attributes. The level of household financial assets is a key but underexplored control that may help to account for some of these difficult-to-observe property characteristics. Using large Australian household surveys, we find that controlling for household financial assets reduces the observed effect of having solar photovoltaic panels on housing prices. The elasticity of housing price with respect to solar capacity is 0.09 for households with solar panels. Controlling for financial assets may be of use in other studies seeking to estimate the effect of home additions on housing prices.

Suggested Citation

  • Rohan Best & Paul J. Burke & Rabindra Nepal & Zac Reynolds, 2021. "Effects of rooftop solar on housing prices in Australia," CCEP Working Papers 2105, Centre for Climate & Energy Policy, Crawford School of Public Policy, The Australian National University.
  • Handle: RePEc:een:ccepwp:2105
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    File URL: https://ccep.crawford.anu.edu.au/sites/default/files/publication/ccep_crawford_anu_edu_au/2021-04/2105_wp.pdf
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    References listed on IDEAS

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    Cited by:

    1. Wim Van Opstal & Anse Smeets, 2022. "Market-Specific Barriers and Enablers for Organizational Investments in Solar PV—Lessons from Flanders," Sustainability, MDPI, vol. 14(20), pages 1-26, October.
    2. Best, Rohan & Chareunsy, Andrea, 2022. "The impact of income on household solar panel uptake: Exploring diverse results using Australian data," Energy Economics, Elsevier, vol. 112(C).
    3. Asproudis, Elias & Gedikli, Cigdem & Talavera, Oleksandr & Yilmaz, Okan, 2024. "Returns to solar panels in the housing market: A meta learner approach," Energy Economics, Elsevier, vol. 137(C).
    4. Dodd, Tracey & Nelson, Tim, 2022. "Australian household adoption of solar photovoltaics: A comparative study of hardship and non-hardship customers," Energy Policy, Elsevier, vol. 160(C).
    5. Gillingham, Kenneth T. & Watten, Asa, 2024. "How is rooftop solar capitalized in home prices?," Regional Science and Urban Economics, Elsevier, vol. 107(C).
    6. Best, Rohan, 2022. "Household wealth of tenants promotes their solar panel access," Economic Modelling, Elsevier, vol. 106(C).

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