The Economic Determinants of Heat Pump Adoption

52 Pages Posted: 12 Jun 2023 Last revised: 23 Aug 2024

See all articles by Lucas Davis

Lucas Davis

University of California, Berkeley - Haas School of Business

Date Written: June 2023

Abstract

One concern with subsidies for low-carbon technologies is that they tend to go predominantly to high-income households. Previous research has shown, for example, that the top income quintile receives 60% of subsidies for rooftop solar and 90% of subsidies for electric vehicles. This paper finds that heat pumps are an important exception. Using newly available U.S. nationally representative data, the paper finds that there is remarkably little correlation between heat pump adoption and household income. Nationwide, 14% of U.S. households have a heat pump as their primary heating equipment, and adoption levels are essentially identical for all income levels ranging from the bottom of the income distribution (<$30,000 annually) to the top ($150,000+). Instead, the paper shows that heat pump adoption is strongly correlated with geography, climate, and electricity prices.

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Suggested Citation

Davis, Lucas, The Economic Determinants of Heat Pump Adoption (June 2023). NBER Working Paper No. w31344, Available at SSRN: https://ssrn.com/abstract=4475942

Lucas Davis (Contact Author)

University of California, Berkeley - Haas School of Business ( email )

545 Student Services Building, #1900
2220 Piedmont Avenue
Berkeley, CA 94720
United States

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