Would you prefer to rent rather than own your new heating system? Insights from a discrete choice experiment among owner-occupiers in the UK

Joachim Schleich, Gengyang Tu, Corinne Faure and Marie-Charlotte Guetlein

Energy Policy, 2021, vol. 158, issue C

Abstract: 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 policy-makers and for providers of heating system rental services.

Keywords: Energy efficiency; Heating systems; Business model; Choice experiment; Renting (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:158:y:2021:i:c:s0301421521003931

DOI: 10.1016/j.enpol.2021.112523

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