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

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

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.

Suggested Citation

  • Schleich, Joachim & Tu, Gengyang & Faure, Corinne & Guetlein, Marie-Charlotte, 2021. "Would you prefer to rent rather than own your new heating system? Insights from a discrete choice experiment among owner-occupiers in the UK," Energy Policy, Elsevier, vol. 158(C).
    • Handle: RePEc:eee:enepol:v:158:y:2021:i:c:s0301421521003931
    DOI: 10.1016/j.enpol.2021.112523
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    2. Fanghella, Valeria & Guetlein, Marie-Charlotte & Schleich, Joachim & Sebi, Carine, 2023. "Preferences on financing mechanisms for thermal retrofit measures in multi-owner buildings: A discrete choice experiment with landlords and owner-occupiers in France," Resource and Energy Economics, Elsevier, vol. 74(C).
    3. Christina Francis & Paul Hansen & Bjarnhéðinn Guðlaugsson & David M. Ingram & R. Camilla Thomson, 2022. "Weighting Key Performance Indicators of Smart Local Energy Systems: A Discrete Choice Experiment," Energies, MDPI, vol. 15(24), pages 1-17, December.
    4. Côté, Elizabeth & Pons-Seres de Brauwer, Cristian, 2023. "Preferences of homeowners for heat-pump leasing: Evidence from a choice experiment in France, Germany, and Switzerland," Energy Policy, Elsevier, vol. 183(C).

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