Determinants of the adoption of energy efficient water heaters in the residential sector: Evidence from a survey in Japan

The purpose of this paper is to explore the determinants that promote the replacement of water heaters with more energy efficient models (e.g., gas or electricity-based energy efficient water heaters). By using survey data on Japanese households' water heater choice collected from an online questionnaire, this paper examines the effect of peers, choice context, and households’ perception of energy sources. The following results are obtained: First, households tend to choose gas or electricity-based energy efficient water heaters which, at the point when the households start to consider replacement, are known to have been used by peers (peer effect). Second, households are more likely to choose a gas or electricity-based energy efficient water heater in the context where they simultaneously replace their water heater and other home facilities (context effect). Finally, as for electricity-based energy efficient water heaters, households with a positive (negative) perception of electricity are more (less) likely to choose an electricity-based energy efficient water heater (perception of energy sources). These results imply the importance of considering these factors when designing policy instruments to promote the adoption of energy efficient water heaters in the residential sector.