An Economic Model for Residential Energy Consumption, Generation, Storage and Reliance on Cleaner Energy


Economic models that provide a framework for understanding determinants of household energy consumption and the rate of reliance on cleaner energy are not available, despite the growing number of residential solar houses. This study presents a theoretical framework for understanding the relationship between energy consumption, generation, storage and the reliance on cleaner energy. Our findings suggest that, (i) households which generate energy could consume more energy than households which do not generate energy, (ii) the economically optimal reliance on solar energy depends on energy prices, income and the slope of the marginal energy storage cost, (iii) there is no relationship between reliance on cleaner energy (or energy demand) and the efficiency level of energy-conversion technologies, and (iv) when buy-back rates are equal to the retail rate of electricity, reliance on generated energy could be zero and energy demand of a generating household may be identical to its non-generating counterpart.



Second Department

Electrical and Computer Engineering

Third Department

Chemical and Biochemical Engineering

Research Center/Lab(s)

Intelligent Systems Center

Keywords and Phrases

Costs; Electric Energy Storage; Energy Conversion; Energy Management; Housing; Solar Buildings; Solar Energy; Solar Heating; Efficiency Levels; Energy Conversion Technologies; Household Energy Consumption; Missouris; Net Metering; Residential Energy Consumption; Solar House; Theoretical Framework; Energy Utilization; Demand Analysis; Economic Analysis; Energy Efficiency; Fuel Consumption; Household Energy; Model; Optimization; Power Generation; Price Dynamics; Reliability Analysis; Residential Energy; Solar Power; Missouri; United States; Buy-Back Rate; Efficiency Technology

International Standard Serial Number (ISSN)


Document Type

Article - Journal

Document Version


File Type





© 2018 Elsevier, All rights reserved.

Publication Date

01 Apr 2018