Is green always better? The effect of renewables on the energy consumption of German households

Abstract

The adoption of green electricity tariffs is seen as one of the approaches to support the energy transition away from conventional to renewable energy sources. The anticipated environmental benefits of the tariff switch might nonetheless be mitigated by behavioral biases and counteracting effects, such as moral licensing and the renewable rebound effect. Using micro-data for 2020 from the German Socioeconomic Panel, this study explores the drivers behind the green tariff adoption by households and analyzes their resulting electricity consumption with an endogenous switching regression model. Our findings suggest that socioeconomic and attitudinal factors are mostly responsible for the adoption of green tariffs. The treatment effects for both adopters and non-adopters based on counterfactuals indicated higher consumption of electricity. Thus, the renewable rebound effect found support in this study and has to be accounted for when planning interventions in the field of energy policy.