Research Project on Renewable Energy Economics, Kyoto University

京都大学経済学研究科

再生可能エネルギー経済学講座

本講座(第2期)は、2024年3月31日をもって終了いたしました。

TOP > ディスカッションペーパー > No.61 Solar Surge and Retail Price Shifts: Heterogenous Redistributional Effects in Japan’s Electric Bills

No.61 Solar Surge and Retail Price Shifts: Heterogenous Redistributional Effects in Japan’s Electric Bills

March 2024
Tuo ZHANG
Assistant Professor, Research Project on Renewable Energy Economics, Graduate School of Economics, Kyoto University





This study examines the impact of solar energy's daily intermittency on electricity pricing, specifically investigating how the “duck curve” and “peak shifting” phenomena affect different consumer groups. Notably, commercial and industrial users exhibit higher demand around midday, while residential users' demand peaks during morning and evening hours. This disparity prompts a key question: do peak shifting and redistribution effects vary across consumer groups due to their distinct electricity consumption patterns? Our analysis focuses on Japan’s power system amid significant solar energy integration, particularly the effects on residential and commercial-industrial sectors, as solar capacity expanded from 42 GW in 2016 to 83 GW in 2022. Using monthly power consumption data, we uncover that increased solar penetration results in higher electricity prices for residential consumers and reduced costs for commercial-industrial users. A central finding is the mediating role of pumped hydro storage (PHS) stations in stabilizing prices during peak and off-peak periods by managing energy demand variability, thereby mitigating economic impacts across consumer groups. The study also sheds light on the issue of cross-class subsidization, where some groups bear disproportionately higher electricity costs due to renewable energy integration. This underscores the necessity for carefully crafted policy interventions to maintain market fairness and sustainability.

Keywords:Solar Penetration, Peak Price Shifting, Cross-group Subsidization, Consumer Electricity Bills, Pumped Hydro Storage