South Korea’s tiered electricity pricing system can lead to a rebound effect following residential solar adoption, according to new research.
Researchers Jiyoung Eum and Gyeong-Seok Choi, from the Korea Institute of Civil Engineering and Building Technology in Goyang, explored whether installing residential solar systems can lead to households in South Korea using more electricity after adopting solar, a phenomenon known as the rebound effect, which occurs when the expected benefits of a more resource-efficient technology are partly offset by changes in consumer behavior or energy use.
In residential solar, for example, households may consume more electricity after installing PV because their self-generated power effectively lowers the cost of consumption. This, in turn, can partially offset the energy-saving and emissions-reduction benefits initially expected from the installation.
Eum and Choi built a simulation framework that matches hourly solar generation against household electricity use to calculate self-consumption rates. It also tracked how households respond when solar adoption shifts them into cheaper price tiers under Korea’s progressive tariff.
Their results found the rebound effect is concentrated in households that cross a tariff tier, with these households offsetting between 11-22% of expected energy savings. In contrast, households that stayed within the same tier saw virtually no rebound effect.
Eum told pv magazine the findings show that PV clearly reduces household electricity use and bills but part of the expected savings can be offset as households increase their consumption.
“Under Korea’s progressive tariff, our study finds that this offset is concentrated in households whose consumption falls into a lower tariff tier after installing PV,” Eum said. “These are simulation-based estimates, and verifying them with metered household data would be a useful extension.”
Additional findings from the research paper found households miss annual emission reductions of 19 to 120 kg of CO2 depending on how many months they spend in transition between tariffs, leading to the suggestion that policymakers evaluating residential solar programs should no longer assume uniform decarbonization outcomes.
The research paper also explores the rebound effect in the context of South Korea’s net metering mechanism, finding that net metering amplifies rather than removes the rebound.
Analysis from the research paper says the rebound effect of high-consumption households effectively doubles, from 4.5% to about 9%, under net metering, as these households are likely to drop their grid consumption and therefore cross into a cheaper tier.
The paper concludes that Korea’s progressive electricity tariff can generate potential rebound effects that partially offset intended energy and emissions savings, uncovering “a dynamic that existing policy evaluation frameworks have not accounted for.” As a result, it recommends that rebound adjustment factors differentiated by tier-transition status, system capacity and net-metering eligibility should be incorporated into PV policy evaluation frameworks.
Eum also explained that government support remains an important driver of residential PV in South Korea, with national subsidy programs reducing the upfront installation cost.
Some local governments adds further support, Eum continued, meaning the level and availability of the support can differ by region and from year to year.
When asked what incentives or policies could help support South Korea’s residential PV market, Eum said continued support for reducing the upfront cost is key to sustaining deployment.
“Solar PV incentives and electricity tariff design are also worth considering together, since the tariff structure affects both household bill savings and the rebound that follows,” the scientist added.
The research findings are presented in the paper “Rebound effects of residential PV adoption under progressive electricity tariffs in South Korea, available in the journal Energy and Buildings.“
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