Fraunhofer-Institut für System- und Innovationsforschung ISI

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  • Publication
    Household preferences for private versus public subsidies for new heating systems: Insights from a multi-country discrete choice experiment
    ( 2022)
    Schleich, Joachim orcid-logo
    ;
    Guetlein, Marie-Charlotte
    ;
    Tu, Gengyang
    ;
    Faure, Corinne
    This paper employs demographically representative discrete choice experiments (DCEs) with owner occupiers in Poland, Sweden, and the United Kingdom (UK) to estimate the effects of subsidies, heating cost savings, installation time (reflecting 'hassle costs') and warranty length on owner occupiers' propensity to invest in a new heating system. In particular, the paper explores whether owner occupiers value subsidies received from public funding sources differently than subsidies received from private funding sources. The results from estimating mixed logit models suggest that respondents not only value subsidies for new heating systems because they decrease the net price, but they also value receiving a subsidy per se. For participants from Sweden (but not from Poland and the UK), this non-monetary value was found to be higher for subsidies offered by a public than by a private funding source. The results for heating cost savings in the three countries imply implicit discount rates between about 11 and 13%. We further find that respondents in Poland dislike longer installation times, and that respondents in all three countries value longer warranty times.
  • 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
    ;
    Tu, Gengyang
    ;
    Faure, Corinne
    ;
    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.