Homeowners’ Preferences for Adopting Residential Heating Systems: A Discrete Choice Analysis for Germany

FCN Working Paper No. 9/2011

42 Pages Posted: 30 Jul 2011 Last revised: 22 May 2012

Date Written: May 31, 2011

Abstract

Space heating accounts for a large fraction of the primary energy consumption and CO2 emissions of residential buildings. Besides targeting the insulation standard, residential heating systems (RHS) offer the potential to reduce energy demand for space heating. Therefore, understanding the determinants of the RHS adoption decision becomes increasingly important. In this paper, we analyze the influence of preferences about RHS-specific attributes on the homeowners’ adoption decision. Moreover, we con-trol for the influence of socio-demographic, home and spatial characteristics. To this end, we specify the discrete appliance choice by a multinomial logit model and apply it to representative survey data for Germany. Our findings show that there are different drivers for the adoption of RHS in newly built and existing 1- and 2-family homes, and that the importance of key drivers also differs across groups of homeowners and RHS, respectively. First, we find that adopters of a gas- and oil-fired condensing boiler with solar thermal support have a strong preference for energy savings, while adopters of a heat pump or wood pellet-fired boiler prefer being more independent from fossil fuels. Second, we find that owners of existing homes have less scope for preferences in the RHS adoption decision. The decision to replace a RHS in an existing home is rather driven by socio-demographic, home and spatial charac-teristics. Third, our findings are quite contrary for newly built homes. Here, preferences about RHS specific attributes are found to be highly relevant, while there is less evidence for an influence of so-cio-demographic, home and spatial characteristics on the adoption decision.

Keywords: Technology adoption, Consumer behavior, residential heating systems, space heating, discrete choice

JEL Classification: D12, 033, Q41, R22

Suggested Citation

Michelsen, Carl Christian and Madlener, Reinhard, Homeowners’ Preferences for Adopting Residential Heating Systems: A Discrete Choice Analysis for Germany (May 31, 2011). FCN Working Paper No. 9/2011. Available at SSRN: https://ssrn.com/abstract=1898688 or http://dx.doi.org/10.2139/ssrn.1898688

Carl Christian Michelsen (Contact Author)

RWTH Aachen University ( email )

Templergraben 55
52056 Aachen, 52056
Germany
00492418049836 (Phone)
00492418049829 (Fax)

HOME PAGE: http://www.eonerc.rwth-aachen.de/fcn

Reinhard Madlener

RWTH Aachen University ( email )

School of Business and Economics / E.ON ERC
Mathieustraße 10
Aachen, 52074
Germany
+49 241 80 49 820 (Phone)
+49 241 80 49 829 (Fax)

HOME PAGE: http://www.eonerc.rwth-aachen.de/fcn

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