Renewable energy and the housing market

Rights statement
Awarding institution
  • University of Strathclyde
Date of award
  • 2022
Thesis identifier
  • T16203
Person Identifier (Local)
  • 201693576
Qualification Level
Qualification Name
Department, School or Faculty
  • Renewable energy sources now provide 27% of global electricity generation, an increase of nearly 38% since 2010. This trend is expected to not only continue, but to accelerate over the coming decades as nations set out domestic policies and international agreements to curb emissions (IEA 2020b). Achieving the ambitious emissions commitments within the Paris Agreement (BEIS 2020b) as well even more ambitious regional targets (ASP 15 2019, WGCCC 2021, PMO 2021) require the deployment of both large and small-scale renewable generation technologies. While some of the infrastructure and capacity necessary to achieve these goals will be located far from populous areas, developments such as onshore wind are increasingly being sited near more densely populated residential areas. At the same time, there is a rapidly growing deployment of residential solar generation installed directly on homes. This thesis contributes to the literature on the externalities associated with renewable energy developments through an assessment of house price trends arising from both large-scale commercial windfarms and residential solar photovoltaic (PV) systems. The research area is England and Wales, places experiencing a rapid deployment of both commercial and domestic renewable energy technologies. Commercial developments are those which export electricity directly to the grid and domestic are primarily used to generate electricity to be used on-site in residential homes. The aim of this thesis is to apply econometric methods to generate new insights into how these developments impact upon house prices. It also sheds light on how the assumptions made and analytical approaches influence the results of such analyses. There is a substantial literature examining the effects of proximity to and visibility of wind energy developments on house prices (Hoen et al. 2011, Brown et al. 2012, Heintzelman & Tuttle 2012, Jensen et al. 2014, Lang et al. 2014, McCarthy & Balli 2014, Vyn & McCullough 2014, Gibbons 2015, Hoen et al. 2015, Dröes & Koster 2016, Heblich et al. 2016, Hoen & Atkinson-Palombo 2016, Sunak & Madlener 2016, 2017, Jensen et al. 2018). This thesis presents original research which extends this literature in a number of ways. In Chapter 3, I extend this literature by replicating a leading paper in the literature (Gibbons 2015). Here I apply an average sales analysis, using the average postcode transaction price to estimate effects, and test the robustness of modifications to the assumptions underpinning the analysis. In Chapter 4, I take the same dataset from Chapter 3 to analyze the effects of windfarm proximity and visibility through the use of a repeat sales analysis, where changes in transaction prices of properties which sell multiple times over the study period are used to create an alternative estimation of price effects from windfarm siting. Chapters 3 and 4 together provide a comparison between the results under average price and repeat sales respectively. Chapter 5 contributes to the nascent literature examining the capitalization of residential PV systems into house prices (Dastrup et al. 2012, Hoen et al. 2013, Wee 2016, Ma et al. 2016, Qiu et al. 2017, Lan et al. 2020). This is the first analysis using data from the housing markets of England and Wales to estimate whether residential solar panels are capitalized into property values. Additionally, this chapter makes use of the largest dataset to date within the wider literature and is the first to use exact matching between solar and non-solar properties through the application of propensity score matching.
Advisor / supervisor
  • Allan, Grant
  • McIntyre, Stuart
Resource Type