The influence of rebate programs on the demand for water heaters: The case of New South Wales

Nada Wasi and Richard Carson

Energy Economics, 2013, vol. 40, issue C, 645-656

Abstract: This paper examines the role of Australian hot water system rebate programs in shifting the existing stock of electric water heaters toward more climate friendly versions using two unique data sets from New South Wales homeowners. The first data set is based on a survey of households who recently purchased a water heater before and after the rebate programs were in place. The other is based on a set of stated preference questions asked of households soon to face a replacement decision. While the former allows us to look at recent responses, the latter enables us to forecast future demand. We find that the programs significantly increase shares of solar/heat pump systems. The programs, however, appear less effective in reducing the stock of electric heaters for households with access to natural gas. This pattern is consistent in both datasets. Results from the discrete choice experiments suggest considerable heterogeneity with respect to household preferences toward different types of water heaters and the discount rates they hold. The effective cost of reducing carbon emissions via incentives for water heater replacement is considered from the counterfactual perspective of no government incentives.

Keywords: Climate change mitigation; Energy conservation programs; Consumer appliance choices; Discrete choice experiments (search for similar items in EconPapers)
JEL-codes: C25 C93 Q40 Q48 Q52 R21 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

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Working Paper: The Influence of Rebate Programs on the Demand for Water Heaters: The Case of New South Wales (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:40:y:2013:i:c:p:645-656

DOI: 10.1016/j.eneco.2013.08.009

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