Household preferences for new heating systems: Insights from a multi-country discrete choice experiment

This paper employs identical demographically representative discrete choice experiments (DCEs) on new heating systems with owner-occupier households in Poland, Sweden, and the United Kingdom (UK) to estimate respondent willingness-to-pay (WTP) for rebates, heating cost savings, installation time (reflecting "hassle costs") and warranty length. The results from estimating country-specific mixed logit models suggest that participants generally value rebates for new heating systems, but valuation differs substantially across countries and was found to be highest for Poland. For Sweden (but not for Poland or the UK), rebates appeared more effective if offered by a public rather than a private funding source. Because higher income households in the UK value rebates more than lower income households, rebates may be regressive. The results for heating cost savings in the three countries imply static payback times of ten to fifteen years for more energy-efficient heating systems. We further find that respondents have a strong dislike for longer installation time and a high WTP for longer warranty times.