Switching from Fossil Fuel to Renewables in Residential Heating Systems: An Empirical Study of Homeowners’ Decisions in Germany

FCN Working Paper No. 14/2013

37 Pages Posted: 25 Mar 2014

Date Written: October 31, 2013

Abstract

This paper investigates key drivers and barriers behind homeowners’ decisions to switch from a fossil fuel (i.e. oil or gas boiler) to a renewable residential heating system (RHS). For this purpose, we draw on data from a 2010 questionnaire survey among owners of existing 1-family or 2-family homes in Germany that had received a financial grant for installing an (at least partly) renewable RHS (i.e. heat pump or wood pellet boiler). We analyze the data by means of logistic regression techniques. First, our results show that the motivation to deal with external threats (i.e. environmental protection and reduction of dependence on fossil fuels) and a higher degree of RHS-related knowledge are key drivers for switching to a renewable RHS. Second, we identify the different barriers that prevent homeowners from adopting a specific RHS. In particular, for the adoption of fossil fuel RHS, the perceived strong reliance on pricey oil or natural gas is found to be a major hurdle. For the heat pump, we find that the perceived difficulty of getting used to the system and a misunderstanding of its principal functioning are important obstacles. Finally, for the wood pellet boiler, our results imply that non-adopters perceive the low usability, the labor-intensive operation, and the systems’ high fault liability to be important barriers. We conclude that homeowners often fear major changes to their current status quo (e.g. replacement of the existing heating system infrastructure) and, thus, tend to opt for minor and thus quick adjustments to their RHS (e.g. replacing only the boiler). Likewise, a higher replacement rate of fossil fuel by renewable RHS requires the homeowners’ willingness to relinquish old habits and perceptions of how an RHS works and operates.

Keywords: Residential heating systems, Private households, Technology replacement, Adoption barriers, Consumer choice

JEL Classification: C25, D12, O33, Q41

Suggested Citation

Michelsen, Carl Christian and Madlener, Reinhard, Switching from Fossil Fuel to Renewables in Residential Heating Systems: An Empirical Study of Homeowners’ Decisions in Germany (October 31, 2013). FCN Working Paper No. 14/2013. Available at SSRN: https://ssrn.com/abstract=2413400 or http://dx.doi.org/10.2139/ssrn.2413400

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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