Accelerating heat pump adoption in Switzerland: An agent-based policy assessment

Linda Brodnicke, Giacomo Rizzo and Giovanni Sansavini

Energy Policy, 2025, vol. 205, issue C

Abstract: Decarbonizing residential heating via heat pumps is expected to be crucial for reducing emissions in the Swiss residential building sector, yet their adoption remains insufficient. This study employs an agent-based model (ABM) to evaluate the effectiveness of policy interventions in accelerating heat pump adoption at the household level. The ABM simulates the heat pump adoption by single- and multi-family houses using the implicit discount rate (IDR) as a measure for the agents’ willingness to invest. We analyze the impact of a carbon tax (120 CHF/ton CO2), a 20 % investment subsidy, and a combination of both on heat pump adoption rates by 2035. In the absence of policy support, heat pump adoption is projected to reach 40 %, missing the national target of 55 %. The introduction of either policy measure increases adoption to 46–47 %, and their combined implementation achieves national targets. Policies reducing upfront investment costs are more effective than those targeting operational costs due to individuals’ high IDRs of 50.3 %. We find that households systematically undervalue long-term financial benefits and are reluctant to make investments. A comprehensive policy mix integrating financial incentives with mechanisms to lower the IDR, including targeted low-interest loans, heating-as-a-service business models, and information campaigns would help overcome these barriers.

Keywords: Agent-based model; Heating transition; Implicit discount rate; Heat pumps; Heating policies (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:205:y:2025:i:c:s0301421525002253

DOI: 10.1016/j.enpol.2025.114718

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