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Exploring the willingness of consumers to electrify their homes

Author

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  • Brown, Marilyn A.
  • Kale, Snehal
  • Cha, Min-Kyeong
  • Chapman, Oliver

Abstract

This paper explores the willingness of consumers to pay for three key electrification technologies – electric vehicles (EVs), rooftop solar (RPV), and air source heat pumps (HPs), using a nuanced two-step model. The first step focuses on whether or not a consumer would consider purchasing a technology, paying particular attention to thresholds and constraints. For those who are willing to pay, the second step focuses on the minimum return-on-investment (ROI) that they require, based on gradations of supporting circumstances such as sustainable lifestyle and climate concern. The second step conjoins respondents' willingness to pay if their energy savings are sufficient and those who are willing to pay if a supportive policy were available. We use the two-step Heckman model to test the validity of our framework using data from an original survey of 1800 adults living in the state of Georgia, USA in 2021.

Suggested Citation

  • Brown, Marilyn A. & Kale, Snehal & Cha, Min-Kyeong & Chapman, Oliver, 2023. "Exploring the willingness of consumers to electrify their homes," Applied Energy, Elsevier, vol. 338(C).
    • Handle: RePEc:eee:appene:v:338:y:2023:i:c:s0306261923001551
    DOI: 10.1016/j.apenergy.2023.120791
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