The Impact of Energy Facility Siting on Property Values

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In this study we investigate the impacts of energy facilities on the surrounding area, through property values, by means of a GIS-based hedonic pricing model. The model will be applied to a wind farm near Rheine in North Rhine-Westphalia (Germany).

Locational choice or optimal siting is crucial for the success of a wind farm project, in part because of the associated visual impact on landscape. The siting decision of wind farms should involve the valuation of negative externalities incurred (e.g. view and noise intrusion, property devaluation), apart from the consideration of technical requirements, economic benefits and spatial aspects. Decreasing social acceptance has become a major and increasingly recognized issue with regard to the successful implementation of wind power projects.

The aim of this project is to quantify negative impacts associated with wind farm sites. In order to quantify these environmental effects, we examine the specific impacts on property values through a GIS-based hedonic pricing model. The hedonic pricing method is most commonly applied to variations in property prices that reflect the values of local environmental attributes. For this purpose, we provide a comprehensive model that includes and controls for many factors that affect property prices, such as structural variables, socio-economic and demographic variables, accessibility variables and spatial land use variables. We apply multiple regression techniques to relate property values to the sets of variables.

Our hedonic pricing model is underpinned by a Geographical Information System (GIS). Through GIS we can handle large sets of spatial data and model a Digital Elevation Model (DEM) of the considered area, which allows us to calculate viewsheds for each property in a 3D environment. Viewsheds provide information about what is visible from a certain property and what is influencing and determining the perspective, including heights and slopes as well as other buildings, trees and other factors. Viewshed modeling with GIS is a useful tool in order to enhance the estimation of environmental impacts.

The generic character of the model allows its application to any feature in the landscape, given related spatial and socio-economic data. Hence, this model is a valuable tool for strategic management and policy decisions, as relevant to a power company or in the field of sustainable urban energy planning. With regard to social acceptance issues, this hedonic pricing model improves the transparency and information dissemination with regard to siting processes through estimation of associated impacts and costs.

Project publications

Sunak Y., Madlener R. (2012). The Impact of Wind Farms on Property Values: A Geographically Weighted Hedonic Pricing Model, FCN Working Paper No. 3/2012, Institute for Future Energy Consumer Needs and Behavior, RWTH Aachen University, May (revised March 2013).



Yasin Sunak, M.A.

Research Associate


+49 (0)241 80 49831