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

Joachim Schleich*, Gengyang Tu, Corinne Faure, Marie Charlotte Guetlein

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

7 Citations (Scopus)

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.

Original languageEnglish
Article number112523
JournalEnergy Policy
Volume158
DOIs
Publication statusPublished - Nov 2021
Externally publishedYes

Keywords

  • Business model
  • Choice experiment
  • Energy efficiency
  • Heating systems
  • Renting

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