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The Economic Determinants of Heat Pump Adoption

In: Environmental and Energy Policy and the Economy, volume 5

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  • Lucas W. Davis

Abstract

One concern with subsidies for low-carbon technologies is that they tend to go predominantly to high-income households. Previous research has shown, for example, that the top income quintile receives 60% of subsidies for rooftop solar and 90% of subsidies for electric vehicles. This paper finds that heat pumps are an important exception. Using newly available U.S. nationally representative data, the paper finds that there is remarkably little correlation between heat pump adoption and household income. Nationwide, 14% of U.S. households have a heat pump as their primary heating equipment, and adoption levels are essentially identical for all income levels ranging from the bottom of the income distribution (
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Suggested Citation

  • Lucas W. Davis, 2023. "The Economic Determinants of Heat Pump Adoption," NBER Chapters, in: Environmental and Energy Policy and the Economy, volume 5, pages 162-199, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberch:14876
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    1. 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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    More about this item

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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