Measuring Renewable Energy Externalities: Evidence from Subjective Well-Being Data

Abstract

Electricity from renewable sources avoids disadvantages of conventional power generation but often meets with local resistance. We use 324,763 observations on the subjective well-being of 46,678 individuals in Germany, 1994–2012, for identifying and valuing the local externalities from solar, wind, and biomass plants in respondents’ postcode district and adjacent postcode districts. We find significant well-being externalities of all three technologies that differ with regard to their temporal and spatial characteristics. The monetary equivalent of 1 MW capacity expansion of wind power and biomass installations is estimated to be 0.35% and 1.25% of monthly per capita income, respectively.