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The Economic Determinants of Heat Pump Adoption

Author

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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 (

Suggested Citation

  • Lucas W. Davis, 2023. "The Economic Determinants of Heat Pump Adoption," NBER Working Papers 31344, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:31344
    Note: EEE
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    Cited by:

    1. Arvanitopoulos, Theodoros & Wilson, Charlie & Morton, Craig, 2025. "Decarbonising residential heating: local conditions and spatial spillovers driving heat pump uptake," LSE Research Online Documents on Economics 128927, London School of Economics and Political Science, LSE Library.
    2. Sébastien Houde & Maya Papineau & Nicholas Rivers & Kareman Yassin, 2025. "Big Hassle on the Decarbonization Frontier," CESifo Working Paper Series 12326, CESifo.
    3. Bishop, Kelly C. & Kiribrahim-Sarikaya, Ozgen, 2024. "Energy-efficient investments in housing," Regional Science and Urban Economics, Elsevier, vol. 107(C).
    4. Ball-Burack, Ari & Sun, Ruixiao & Stack, Stephen & Ou, Shiqi (Shawn) & Bose, Ranjan & Yang, Hung-Chia, 2025. "Assessing the behavioral realism of energy system models in light of the consumer adoption literature," Renewable and Sustainable Energy Reviews, Elsevier, vol. 211(C).
    5. 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).

    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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