Electricity prices and consumers’ long-term technology choices: Evidence from heating investments

Sahari, Anna

doi:10.1016/j.euroecorev.2019.02.002

Cited by 20 publications

(9 citation statements)

References 37 publications

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“…The effect is similar in magnitude to the effect of high education, but opposite in sign at -0.95. It is difficult to interpret this result, especially in light of the results in Sahari (2019) where I find that house ownership increases sensitivity to electricity prices. This implies that in the context of total heating system costs, house ownership incorporates other aspects than purely price sensitivity.…”

Section: Discussionmentioning

confidence: 88%

“…These results are not conditional on the level of heating system purchase costs, and they can therefore be compared to the results obtained in Sahari (2019). In that study, I use the same data to estimate the impact of electricity prices on the choice of heating technology using a multinomial logit framework.…”

Section: Annual Heating Costs and Technology Choicementioning

confidence: 99%

“…This paper is complementary to Sahari (2019), where I use this same data to study how sensitive heating technology choice is to electricity prices. In that paper, I use a different estimation sample and look at results conditional on household characteristics.…”

Section: Introductionmentioning

confidence: 99%

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Household heterogeneity in valuation of heating energy costs

Sahari

2021

SSRN Journal

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This paper studies consumer heterogeneity in the valuation of lifetime heating energy costs. The valuation is expressed as the willingness to pay higher upfront costs to obtain savings over the lifetime of the heating system. The analysis relies on administrative register data on new residential houses built by private persons in Finland during 2010-2011. The data allow estimating the WTP as a function of several observable household characteristics. The median WTP in the estimation sample is e8, with a range of e2 to e15. Households with higher income and education are estimated to have higher WTP. Other characteristics that impact the WTP are household debt, family type and size, current dwelling status and previous experience of building a house.

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Section: Discussionmentioning

confidence: 88%

Section: Annual Heating Costs and Technology Choicementioning

confidence: 99%

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Household heterogeneity in valuation of heating energy costs

Sahari

2021

SSRN Journal

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“…Findings from earlier literature in this regard have been mixed, with some documenting no effect whatsoever of higher energy prices on the purchases of efficient durables (e.g., Hastings and Shapiro, 2013;Jacobsen, 2015;Cohen et al, 2015), and others finding that increases in the price of the energy input (motor fuel) increase the share of efficient new durables (cars) and lower the prices of used and inefficient durables relative to their more efficient counterparts (Busse et al, 2013). Sahari (2019) documents that in Finland changing electricity prices influence the choice of heating system in new single-family homes, and Myers (2019) exploits different trends in heating oil and electricity prices to show that heating costs differentials do make homes in Massachusetts with different heating systems more or less attractive, and are thus capitalized in home prices.…”

Section: E Effects Of Price Changesmentioning

confidence: 99%

The Elusive Effects of Residential Energy Efficiency Improvements: Evidence from Ukraine

2019

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Untapped improvements in energy efficiency in the residential sector may deliver large savings in energy use and the CO2 associated emissions. Yet empirical assessments have been difficult and controversial. We collect monthly natural gas meter readings from a sample of homes in Transcarpathia, in Western Ukraine, an early adopter of the country's trend away from district heating, from January 2013 to April 2017, a period over which the residential natural gas tariffs rose by over 700%. We combine the monthly meter readings with documentation about each household's heating-related energy efficiency upgrades to the home (wall, attic or basement insulation; new windows; boiler replacement, and insulation around pipes) to form a panel dataset. We estimate the effect of the energy efficiency renovations on natural gas consumption, controlling for weather, income and government energy assistance. The decision to do the renovations and natural gas consumption are likely endogenous (people do the renovations because they hope to consume less), so we instrument for the renovations by creating a cross-validation instrument based on a supply-side argument. Even for a given type of energy efficiency upgrades, the estimated effect of the renovations varies dramatically in magnitude, depending on whether the renovations are instrumented for and on how detailed the fixed effects are. The coefficients on the renovations are almost always negative in our regressions, but practically and statistically significant only when we instrument for the renovations. This is in agreement with our respondents' difficulty assessing whether the renovations had saved them gas or money. The IV estimates indicate that insulation delivers 13-24% reductions in natural gas usage, and up to a 5% internal rate of return (IRR) to the investment over 20 years. Judicious use of an existing government program can yield positive IRRs and make energy efficiency upgrades a good investment in a generally poor-performing housing market.

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“…The different behavioral aspects give new meaning to the consumer's relationship with energy, which has implications mainly for the relationship between the consumer and the distribution system operators. Different perspectives approach this relation: Politics and regulation [22][23][24], demand and electrical networks [25][26][27][28][29], prices and markets [30][31][32], and impacts and diffusion [33][34][35][36]. It is noteworthy that the literature highlights the importance of consumer heterogeneity and the existence of behavioral factors that should not be ignored by the distribution system operators, especially concerning photovoltaic adoption.…”

Section: Introductionmentioning

confidence: 99%

Factors for Measuring Photovoltaic Adoption from the Perspective of Operators

et al. 2020

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The diffusion of photovoltaic distributed generation is relevant for addressing the political, economic, and environmental issues in the electricity sector. However, the proliferation of distributed generation brings new administrative and operational challenges for the sustainability of electric power utilities. Electricity distributors operate in economies of scale, and the high photovoltaic penetration means that these companies have economic and financial impacts, in addition to influencing the migration of other consumers. Thus, this paper aims to systematically identify and evaluate critical factors and indicators that may influence electricity distributors in predicting their consumers' adoption of photovoltaic technology, which were subjected to the analysis of 20 industry experts. Results show that the cost of electricity, generation capacity, and cost of the photovoltaic systems are the most relevant indicators, and it is possible to measure a considerable part of them using the internal data of the electricity distributors. The study contributes to the understanding of the critical factors for the forecast of the adoption of consumers to distributed photovoltaic generation, to assist the distribution network operators in the decision making, and the distribution sustainability. Also, it establishes the theoretical, political, and practical implications for the Brazilian scenario and developing countries.

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Electricity prices and consumers’ long-term technology choices: Evidence from heating investments

Cited by 20 publications

References 37 publications

Household heterogeneity in valuation of heating energy costs

Household heterogeneity in valuation of heating energy costs

The Elusive Effects of Residential Energy Efficiency Improvements: Evidence from Ukraine

Factors for Measuring Photovoltaic Adoption from the Perspective of Operators

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