Fraunhofer-Institut für System- und Innovationsforschung ISI

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  • 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
    How effective are EU minimum energy performance standards and energy labels for cold appliances?
    ( 2021)
    Schleich, Joachim orcid-logo
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    Durand, Antoine orcid-logo
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    Brugger, Heike orcid-logo
    In most countries, minimum energy performance standards (MEPS) and energy labels are the key policies to accelerate the diffusion of energy-efficient appliances and to help meet energy efficiency and climate policy targets. This paper estimates country-specific multivariate econometric models for eight EU countries over the period of 2007 to 2017 to evaluate the combined effects of changes in the MEPS and the energy labels entering into force in the EU in 2010 and 2011. The findings suggest that these policies increased the market share of cold appliances (refrigerators and fridge-freezer combinations) with an energy label of A+ and better between about 15 and 38 percentage points. For these appliances, autonomous developments (captured through a time trend) are estimated to range between 5 and 10 percentage points per year. Thus, failure to account for autonomous developments would have resulted in substantially overestimating the combined effects of MEPS and energy label policies in the EU. The findings further imply that policy evaluations should allow for policy effectiveness and autonomous developments to differ across countries.
  • 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
    ;
    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
    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).
  • Publication
    A brighter future? Quantifying the rebound effect in energy efficient lighting
    ( 2014)
    Schleich, Joachim orcid-logo
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    Mills, Bradford F.
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    Dütschke, Elisabeth orcid-logo
    This paper quantifies the direct rebound effects associated with the switch from incandescent lamps (ILs) or halogen bulbs to more energy efficient compact fluorescent lamps (CFLs) or light emitting diodes (LEDs) using a large nationally representative survey of German households. The direct rebound effect is measured as the elasticity of energy demand for lighting with respect to changes in energy efficient lamps. In particular, the rebound effect is decomposed into changes in lamp luminosity and burn time. For the average bulb, the associated total direct rebound effect is estimated at about 6%. The larger part (around 60%) of this rebound effect results from increases in bulb luminosity. For the most frequent (modal) bulb switch, i.e. the replacement of the main bulb in the living or dining room, the total direct rebound effect is just below 3%, with around 60% attributable to an increase in burn time. Average and modal bulb differences suggest that the magnitude of the rebound effect may decrease with intensity of initial bulb use. The magnitude of the direct rebound and the relative contributions of changes in luminosity and burn time also differ by initial bulb type and by replacement bulb type.