The rebound effect is not about dating and can be explained by your air conditioner

“Rebound effect” is a concept that appears frequently in research on energy efficiency. While Mar Reguant, an assistant professor of economics at Northwestern, has found evidence of a rebound effect in her recent work on energy efficiency in schools, it’s easier to see this effect at the household level:

Let’s say you buy a really nice air conditioning unit for your home. The new AC unit replaces a louder and less energy efficient unit. You justify the cost of the new unit by reminding yourself that because it’s energy efficient, your ComEd bill will be lower than it was with the old unit.

But because your upgraded AC is quieter and more efficient, you find yourself using it more – perhaps unconsciously running it for more hours in a day or keeping your house cooler than you had before. Enter the rebound effect.

If you had used the two AC units in the same way, your new unit would have saved you, let’s arbitrarily say, 100 watts of energy. But now, because you’re using the new unit more, you’re only saving 60 watts of energy. The other 40 watts are being consumed by the increased use, and the effects – the savings – are less than they would have been if you had used the two units in the same manner.  In other words, your savings are rebounding.

Reguant is quick to note that the new AC unit is still delivering benefits. You are, in fact, saving energy, and even if you’re using the AC more, you’re still benefiting from a cooler, more comfortable home. But with the rebound effect, you’re not quite getting the effects you initially anticipated.

“So you’re better off,” Reguant says. “You still save money, but you save less energy than you expected.”

Reguant recently received a Sloan Research Fellowship from the Alfred P. Sloan Foundation. Learn more about Reguant’s research on industrial organization, energy and environmental markets on her website.