Preferences for Renewable Home Heating: A Choice Experiment Study of Heat Pump System in Ireland

Tensay Meles, Lisa Ryan and Sanghamitra Mukherjee

Open Access publications from School of Economics, University College Dublin

Abstract: Renewable sources of home heating like heat pump systems are expected to play a vital role in mitigating the adverse effects of carbon-intensive heating systems. Compared to conventional heating systems, heat pump systems are more energy efficient, have low maintenance and operational costs and provide reliable and environmentally friendly home heating. Despite those advantages, the uptake of heat pumps has been low among the Irish population and little is known about the factors that affect their adoption. This paper uses a discrete choice experiment approach to investigate preferences for heat pumps in the residential sector based on nationally representative household survey data from Ireland. We analyse the choice data using a mixed logit model and estimate the marginal willingness to pay for bill savings, environmentally sustainable, installation hassles and increase in home comfort using both models in preferences space and in willingness to pay (WTP) space. Our results show that upfront cost, bill savings, environmental sustainability and installation hassle significantly influence household uptake of heat pumps. The estimated results also reveal the presence of heterogeneous preferences. Furthermore, the results show that households are willing to pay for heat pumps; however, the values might not be large enough to cover the higher upfront costs of, for example, a ground source heat pump. Overall, the study highlights that policy makers should consider the various financial and non-financial factors that influence adoption and heterogeneity in preferences in designing policy intervention aimed at increasing the uptake of heat pumps.

Keywords: Heat-pump system; Choice experiment; Mixed logit model; Willingness to pay (search for similar items in EconPapers)
Pages: 24 pages
Date: 2019-06
New Economics Papers: this item is included in nep-dcm, nep-ene and nep-env
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Citations: View citations in EconPapers (3)

Published: The 24th Annual Conference of the European Association of Environmental and Resource Economists, Manchester, United Kingdom, 26-29 June 20192019-06-29

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http://hdl.handle.net/10197/11467 Open Access version, 2019 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:ucn:oapubs:10197/11467

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