Do households respond to Time-Of-Use tariffs? Evidence from Australia

[img]
Preview
200612 TOU tariff paper.pdf - Published Version (302kB) | Preview
Available under license: Creative Commons Attribution

Burns, Kelly and Mountain, Bruce ORCID: 0000-0002-2093-2038 (2020) Do households respond to Time-Of-Use tariffs? Evidence from Australia. Working Paper. Victoria Energy Policy Centre, Victoria University, Melbourne, Victoria.

Abstract

We estimate the elasticity of substitution for households on Time-Of-Use (TOU) tariffs using a sample of 6,957 electricity bills from households in Victoria, Australia. Across the full sample we find the difference between peak and off-peak prices has little influence on the difference between peak and off-peak consumption and is not affected by access to rooftop photovoltaics. Households in the lowest socio-economic areas do not respond to differences in peak and offpeak prices. Our findings of the elasticity of substitution are remarkably similar to previous studies of TOU tariffs in the United States of America in the 1980s. This suggests retail market deregulation, the installation of smart meters, consumers’ access to their consumption data and enduring policy support for TOU tariffs has not been rewarded with any measurable improvement in consumers’ responsiveness to time-varying prices. While freedom to select TOU tariffs is valuable, these findings do not support the imposition of TOU tariffs as a default pricing policy.

Dimensions Badge

Altmetric Badge

Item type Monograph (Working Paper)
URI https://vuir.vu.edu.au/id/eprint/40599
DOI https://doi.org/10.26196/5ee2f43f2894f
Subjects Current > FOR Classification > 1402 Applied Economics
Current > Division/Research > Institute for Sustainable Industries and Liveable Cities
Keywords Time-Of-Use, load shifting, elasticity of substitution, electricity
Download/View statistics View download statistics for this item

Data Citation/Attribution

Burns, K., & Mountain, B. (2020). Do households respond to Time-Of-Use tariffs? Evidence from Australia. Victoria Energy Policy Centre, Victoria University. https://doi.org/10.26196/5EE2F43F2894F

Search Google Scholar

Repository staff login