Fraunhofer-Institut für System- und Innovationsforschung ISI

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  • Publication
    Household acceptability of energy efficiency policies in the European Union: Policy characteristics trade-offs and the role of trust in government and environmental identity
    ( 2022)
    Faure, Corinne
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    Guetlein, Marie-Charlotte
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    Schleich, Joachim orcid-logo
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    Tu, Gengyang
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    Whitmarsh, Lorraine
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    Whittle, Colin
    This research investigates the acceptability of energy efficiency policies among European households. Based on large-scale surveys in Italy, Poland, Sweden, and the UK, we use a discrete choice experiment to study the tradeoffs made by households between various policy characteristics including policy target level, dependence on energy imports, policy instruments (education and information programmes, standards, taxation, energy consumption limit), costs to the household, and distribution of costs between households and other sectors. In particular, we investigate the role of trust in government and of environmental identity on the acceptability of these policy characteristics. Across the four countries, we find that households prefer effective policies, dislike personal costs, and prefer non-coercive to coercive instruments; further, trust in government helps make coercive policies such as taxes more acceptable, whereas higher environmental identity makes consumption limits more acceptable.
  • Publication
    Discriminatory subsidies for energy-efficient technologies and the role of envy
    ( 2022)
    Fanghella, Valeria
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    Faure, Corinne
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    Guetlein, Marie-Charlotte
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    Schleich, Joachim orcid-logo
    Discriminatory subsidies, that is, subsidies for which only a subset of the population is eligible, are widespread. However, research on social preferences suggests that non-eligible households may negatively respond to these subsidies. We investigate both eligible and non-eligible households' response to discriminatory subsidies for smart thermostats using a discrete choice experiment with 3071 owner-occupiers from France and Romania. Households are randomly exposed to discriminatory subsidies through a between-subject design that manipulates two factors: type of discrimination (positive or negative) and eligibility criteria (based on geographical location or on household characteristics). A control condition (uniform subsidy) is also included. In addition, we elicit envy via an incentivized game in the sample from France. Our results show that eligible households are more likely to adopt a smart thermostat, regardless of whether the subsidy is uniform or discriminatory. By contrast, non-eligible households are less likely to adopt it, especially when eligibility criteria are based on household characteristics. We find no evidence for a moderating effect of envy.
  • Publication
    Adoption of retrofit measures among homeowners in EU countries: The effects of access to capital and debt aversion
    ( 2021)
    Schleich, Joachim orcid-logo
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    Faure, Corinne
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    Meissner, Thomas
    Energy efficiency policies often involve low-interest loans for retrofit measures in private buildings; the main target of these loans are meant to be households with otherwise poor access to capital. However, such programs can only be successful if the targeted households also take up these loans. This paper studies the relation between access to capital and debt aversion and the adoption of retrofit measures in European Union countries, employing a demographically representative household survey including about 6600 homeowners in France, Germany, Italy, Poland, Romania, Spain, Sweden, and the United Kingdom. The findings suggest that debt aversion negatively affects the adoption of retrofit measures by homeowners. In particular, debt-averse homeowners with poor access to capital are less likely to have adopted retrofit measures than non-debt-averse homeowners with poor access to capital. The findings further provide evidence that low-interest loan programs should be targeted at younger homeowners with lower income and less formal education.
  • Publication
    The heat is off! The role of technology attributes and individual attitudes in the diffusion of smart thermostats - findings from a multi-country survey
    ( 2021)
    Tu, Gengyang
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    Faure, Corinne
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    Schleich, Joachim orcid-logo
    ;
    Guetlein, Marie-Charlotte
    Smart thermostats may provide up to 10% savings in residential thermal energy use without loss of comfort, yet their diffusion has typically been slow. To better understand adoption of these devices, we conducted an online survey with approximately 5,500 respondents from eight European countries that included both a discrete choice experiment (DCE) and stated past adoption of smart thermostats. The results we obtained by estimating mixed logit models suggest that households value heating cost savings, remote temperature control, the display of changes in energy consumption, and recommendations by experts, albeit with substantial heterogeneity across countries; in comparison, subsidies are positively valued in all countries except for Germany and Spain, and recommendations by energy providers in all countries except Poland where they are negatively valued. Further, the findings provide evidence that consumer innovativeness reinforces the acceptance of technical attributes (heating cost savings, feedback functionalities, and remote temperature control), that privacy concerns reduce the acceptance of remote functionalities, and that stronger environmental identity reinforces the acceptance of environmentally related attributes (heating cost savings and feedback functionalities). The results we obtained from estimating binary response models of stated past adoption of smart thermostats are generally consistent with those of the DCE.
  • Publication
    Effects of rescaling the EU energy label on household preferences for top-rated appliances
    ( 2021)
    Faure, Corinne
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    Guetlein, Marie-Charlotte
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    Schleich, Joachim orcid-logo
    The European Union has decided to replace its previously existing A+++ to D labelling scheme for cold appliances with a rescaled A to G labelling scheme in 2021. Employing a demographically representative discrete choice experiment on refrigerator adoption using an online survey among more than 1000 households in Germany, this paper explores the effects of the rescaled scheme compared to the previous scheme on the stated uptake of top-rated refrigerators, i.e. those classified A+++ under the previous scheme and B under the rescaled scheme. Since in practice both schemes may be shown for a transitory period, the paper also explores the effects of displaying both labels simultaneously. The findings from estimating a mixed logit model suggest that showing the rescaled label alone significantly increases valuation of top-rated refrigerators compared to showing the previous A+++ to D label alone. In comparison, when the previous A+++ to D and the rescaled A to G schemes are shown simultaneously, no benefits of introducing the rescaled label are found. Thus, policymakers should strive to enforce the application of the rescaled labelling scheme as quickly as possible and to shorten transitory periods where both labels are shown simultaneously.
  • Publication
    Would you prefer to rent rather than own your new heating system? Insights from a discrete choice experiment among owner-occupiers in the UK
    ( 2021)
    Schleich, Joachim orcid-logo
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    Tu, Gengyang
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    Faure, Corinne
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    Guetlein, Marie-Charlotte
    By offering to rent energy technologies, energy suppliers and other companies may tap into new market segments, allowing them to preserve or increase market shares. Because such rental services can help overcome capital-related and other barriers to energy efficiency, they may also contribute to achieving ambitious energy and climate targets. Yet, empirical analyses of renting energy technologies are scarce. Employing a large-scale discrete choice experiment among owner-occupiers in the United Kingdom, this study explores households' willingness-to-pay for renting compared to owning their new heating system. The findings obtained from mixed logit models suggest that, on average, participants strongly dislike renting compared to owning their new heating system, in particular owner-occupiers who are older than 70 years. However, about a third of the sample is estimated to prefer renting. On average, participants also value heating cost savings associated with energy efficient heating systems and longer warranty periods. Finally, the paper discusses implications for policymakers and for providers of heating system rental services.
  • Publication
    Conveyance, envy, and homeowner choice of appliances
    ( 2020)
    Schleich, Joachim orcid-logo
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    Faure, Corinne
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    Guetlein, Marie-Charlotte
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    Tu, Gengyang
    Conveyance, i.e. the fact that an appliance purchased will be left in a dwelling when moving out, may lead homeowners to purchase appliances of lower quality or performance, because the extra costs are not entirely capitalized into the house sales price. Employing a discrete choice experiment with homeowners in the United States, this paper explores the effects of conveyance on homeowners' willingness-to-pay for various attributes of refrigerators. To account for the social nature of purchases when conveyance is likely to occur, it also tests the role of envy (elicited through an incentivized game). The findings provide evidence that conveyors are more likely than non-conveyors to purchase a smaller refrigerator, from a less well-known brand, and with lower customer ratings. In contrast, conveyance was not found to affect homeowners' choices when it comes to energy cost. In addition, envy was found to generally reinforce the negative effects of conveyance on homeowners' willingness-to-pay for several quality and performance attributes. While conveyance and its interaction with envy help explain why some homeowners choose certain quality/performance attributes of appliances, these factors do not appear to explain the energy efficiency paradox.
  • Publication
    Exploring the diffusion of low-energy houses: An empirical study in the European Union
    ( 2019)
    Olsthoorn, Mark
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    Schleich, Joachim orcid-logo
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    Faure, Corinne
    Diffusion of low-energy houses is an important part of energy and climate policy in the European Union (EU) and in individual EU countries. Key barriers to the adoption of low-energy houses include additional construction costs and uncertainty surrounding actual energy and cost savings. In this paper, we econometrically analyze determinants of low-energy house adoption, including time and risk preferences. We rely on original data from a large survey conducted among households in eight EU countries. To our knowledge, this is the first empirical study of low-energy building adoption to rely on a demographically representative sample. Our set of covariates includes parameters of time and risk preferences that were elicited via state-of-the-art incentivized multiple price list experiments and via self-assessment scales. We find mixed results for the effects of time discounting on low-energy house adoption. Risk preferences do appear to matter: as risk proneness increases, so does the adoption of zero net or energy plus building (but not passive houses). Consistent with the low-cost hypothesis about environmental attitude and action, we find no results for environmental attitudes and social norms.
  • Publication
    Household internal and external electricity contract switching in EU countries
    ( 2019)
    Schleich, Joachim orcid-logo
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    Faure, Corinne
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    Gassmann, Xavier
    Using a representative sample of more than 13,000 households from eight countries in the European Union (EU), this article empirically studies the factors related to household electricity contract switching by distinguishing between internal switchers (households that switched contracts but stayed with the same supplier) from external switchers (households that switched to a new supplier). The econometric analysis includes individual preferences, household structural factors and socio-demographic characteristics, as well as electricity market characteristics. The study explicitly explores the role of risk and time preferences on switching behaviours, with risk and time preferences elicited through incentivized experiments as well as self-assessment scales. The main results suggest that internal and external switching are not related to the same factors, that risk and time preferences affect switching behaviours, and that renters are less likely to switch than homeowners; further, electricity market characteristics are found to affect household electricity contract switching.
  • Publication
    Making the implicit explicit: A look inside the implicit discount rate
    ( 2016)
    Schleich, Joachim orcid-logo
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    Gassmann, Xavier
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    Faure, Corinne
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    Meissner, Thomas
    Implicit discount rates (IDRs) are employed in energy models to capture household investment decisions, yet the factors behind the IDR and their respective implications for policy-making usually remain blurred and fractional. The proposed comprehensive framework distinguishes three broad categories of factors underlying the IDR for household adoption of energy-efficient technologies (EETs): preferences (notably over time, risk, loss, debt, and the environment), predictable (ir)rational behavior (bounded rationality, rational inattention, behavioral biases), and external barriers to energy efficiency. Existing empirical findings suggest that the factors underlying the IDRs that differ across household characteristics and technologies should be accounted for in energy models. Furthermore, the framework allows for a fresh look at the interplay of IDRs and policies. We argue that a simple observation of high IDRs (or observing correlations between IDRs and socio-economic characteristics) does not provide guidance for policy-making since the underlying sources cannot be identified. Instead, we propose that some of the factors underlying the IDR - notably external barriers - can be changed (through directed policy interventions) where as other factors - not ably preferences and predictable (ir)rational behavior - are innate and can only be taken into account (through reactive policy interventions).