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Energy Efficiency Investments in the Home: Swiss Homeowners and Expectations about Future Energy Prices

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  • Anna Alberini, Silvia Banfi, and Celine Ramseier

Abstract

Using conjoint choice experiments, we surveyed 473 Swiss homeowners about their preferences for energy efficiency home renovations. We find that homeowners are responsive to the upfront costs of the renovation projects, government-offered rebates, savings in energy expenses, time horizon over which such savings would be realized, and thermal comfort improvement. The implicit discount rate is low, ranging from 1.5 to 3%, depending on model specification. This is consistent with Hassett and Metcalf (1993) and Metcalf and Rosenthal (1995), and with the fact that our scenarios contain no uncertainty. Respondents who feel completely uncertain about future energy prices are more likely to select the status quo (no renovations) in any given choice task and weight the costs of the investments more heavily than the financial gains (subsidies and savings on the energy bills). Renovations are more likely when respondents believe that climate change considerations are important determinants of home renovations.

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  • Anna Alberini, Silvia Banfi, and Celine Ramseier, 2013. "Energy Efficiency Investments in the Home: Swiss Homeowners and Expectations about Future Energy Prices," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1).
  • Handle: RePEc:aen:journl:ej34-1-03
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    1. Olsthoorn, Mark & Schleich, Joachim & Faure, Corinne, 2019. "Exploring the diffusion of low-energy houses: An empirical study in the European Union," Energy Policy, Elsevier, vol. 129(C), pages 1382-1393.
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    12. Jia, Jun–Jun & Wu, Hua-Qing & Nie, Hong-Guang & Fan, Ying, 2019. "Modeling the willingness to pay for energy efficient residence in urban residential sector in China," Energy Policy, Elsevier, vol. 135(C).
    13. Galassi, Veronica & Madlener, Reinhard, 2016. "Some Like it Hot: The Role of Environmental Concern and Comfort Expectations in Energy Retrofit Decisions," FCN Working Papers 11/2016, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
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    17. Anil Markandya & Xavier Labandeira & Ana Ramos, 2013. "Policy Instruments to Foster Energy Efficiency," Working Papers 01-2014, Economics for Energy.
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    24. Laes, Erik & Mayeres, Inge & Renders, Nele & Valkering, Pieter & Verbeke, Stijn, 2018. "How do policies help to increase the uptake of carbon reduction measures in the EU residential sector? Evidence from recent studies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 94(C), pages 234-250.
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