The discussion of the support for renewable energy must consider the distributional impact of cost allocation. The public is sensitive to social imbalances caused by rising power prices that might jeopardize the acceptance of energy transformation. By the end of 2012 about 19 percent of German power is produced with renewables other than hydropower. As a result, German consumers will pay for global learning investment through their electricity bill. We explore the distributional implications for households using household micro data. The effect is more significant for poor households, which allocate 4.5% of expenditure for power. We propose three options how to address this distributional impact: adjusted transfers, reduced electricity taxes, and, most effectively, support to improve energy efficiency.
Themen: Energiewirtschaft
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