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Discussion Paper Details

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Title: Wind turbines, solar farms, and house prices

Author(s): Martijn Dröes and Hans R.A. Koster

Publication Date: July 2020

Keyword(s): House Prices, solar farms and wind turbines

Programme Area(s): International Trade and Regional Economics

Abstract: To cope with the increasing demand for renewable energy, wind turbines have become taller over time. In addition, with advances in solar cell technology the commercial exploitation of solar farms has increased considerably in recent years. This paper adds to the existing literature by examining the effect of wind turbines - with a particular focus on turbine height - and solar farms on house prices. Using detailed data from the Netherlands between 1985-2019, the results show that tall wind turbines have considerably stronger effects on house prices, as compared to small turbines. For example, a tall turbine (>150m) decreases house prices within 2km by 5.4%, while a small turbine (<50m) has an effect of 2% at most and the effect quickly dissipates after 1km. Further results indicate that solar farms seem to lead to a decrease in house prices within 1km of about 2-3%. By comparing the overall impact on house prices, we show that building solar farms rather than wind turbines does not seem to be a way to avoid the external effects of renewable energy production.

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Bibliographic Reference

Dröes, M and Koster, H. 2020. 'Wind turbines, solar farms, and house prices'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=15023