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The role of financial development (FD) in China’s environment has attracted extensive attention from scholars, but few studies involved the effect of FD on urban electricity consumption (EC). This paper constructs two spatial panel models to explore the interaction between FD and EC on the basis panel data of 278 cities in China from 2005 to 2016. The results show that electricity consumption of urban residents and industrial sector in China has obvious spatial correlation and unbalanced spatial distribution. Secondly, FD can promote urban industrial electricity consumption (IEC) and urban residential electricity consumption (REC), and it has a greater impact on REC than IEC. Thirdly, spatial heterogeneity is established, and the imbalance of REC and IEC among different regions and urban scales deserves more attention. FD is conducive to enhance REC and IEC in the eastern and western regions. Meanwhile, FD plays an important role in the increase of REC and IEC in small cities, large cities, and megacities of China. Considering the above results, this paper puts forward targeted policy recommendations.

Does Financial Development Increase Urban Electricity Consumption? Evidence from Spatial and Heterogeneity Analysis