Paul Thorsnes “ Helping householders choose: variation in preferences for aspects of energy-efficiency improvements.” Energy Cultures Conference 2016

1. Helping householders choose:
Variation in preferences for aspects of
energy-efficiency improvements
Paul Thorsnes
Department of Economics
&
Centre for Sustainability

2. upgrading houses to be
warm, healthy
and energy efficient
in a context of considerable diversity!
A big objective…

3. Diversity in climates…
Temperature Sunshine Rainfall

4. Diversity in households…

5. and diversity in the housing stock…

6. Diversity in retrofits…

7. Retrofits vary greatly in a
variety of characteristics
They need to:
work well with the house
and with each other
fit well with household
norms and practices
Choosing retrofits can
require complex trade-offs
Simple outcome, that requires complex inputs…

8. We investigated this question using choice surveys
First step: identify aspects in which energy retrofits vary
In separate surveys we asked home owners to:
1. identify the six aspects they care most about
2. indicate their willingness to make trade-offs among a
particular set of aspects
In each case, we identified clusters of respondents
with similar preferences for characteristics
How do NZers vary in their willingness to make trade-offs?

9. Sample #1
149 owner-occupiers in Dunedin
recruited from three census area units (suburbs)
that together house a wide demographic range of households
Respondent AGE Gender Qualification

10. Household income Household composition
House vintage House insulation

12. What did we find?
Both consistency
Value for money (~85%)
Works reliably (~70%)
As energy efficient as advertised (~65%)
and variation
Independence from the grid
+ Environmental benefits
OR + DIY install
Improvement: Fits with the house
Capitalises into house value
Improves ventilation
Is safe

13. The consistency in what people care about raises another question:
how much do householders vary in their
willingness to make trade-offs
among the aspects they care most about?
we investigated this question with a survey that asks them to
make a series of hypothetical, but realistic, trade-offs

14. Which heating system do you prefer?
One that… Or one that…
disturbs your neighbours disturbs your neighbours
somewhat due to noise or smoke not at all
depends on energy from the grid depends on energy from the grid
not at all totally
assuming all other aspects of the heating systems are the same
Here’s an example of a trade-off question

15. Who participated?
Households were recruited nationally
by a market research firm that recruits participants through a loyalty
program
survey respondents earn “reward points”
database consists of about 90,000 email addresses
We targeted home owners (with or without mortgage)
with a demographic profile similar to NZ’s
22% response rate, or 810 responses

16. Again, a good range of observable characteristics
Geographic distribution is closely representative
Household characteristics Sample Population
1 person 9.2% 22.6%
2 person 38.5% 25.2%
3 – 5 person 47.4% 27.0%
Age > 65 17.0% 16.4%
Age 30 – 64 74.5% 56.9%
Med HH income 70 – 80k 60 – 70k
Paying mortgage 67.9% 54.9%
House built before 1978 52.6%
Space heating
Wood burner 28.5%
Heat pump 28.3%
Portable/fixed gas 13.9%
Portable electric 12.3%
Central heating 2.5%

17. Relative
strength of
preference
Low upfront cost 17
Low running cost 14
Capitalises into house value 8
Works as advertised 11
Easy to operate 8
Fits with house 13
Disturbs neighbours 10
Disturbs householders 11
Independent of the grid 8
What did we find?

18. Relative
strength of
preference
Low upfront cost 17
Low running cost 14
Capitalises into house value 8

19. Relative
strength of
preference
Low upfront cost 17
Low running cost 14
Capitalises into house value 8
Works as advertised 11
Easy to operate 8
Fits with house 13
Disturbs neighbours 10
Disturbs householders 11
Independent of the grid 8
Sample average results

20. Average Min Max
Low upfront cost 17 4 49
Low running cost 14 3 37
Capitalises into house value 8 1 32
Works as advertised 11 1 29
Easy to operate 8 2 29
Fits with house 13 1 33
Doesn’t disturb neighbours 10 1 30
Doesn’t disturb householders 11 1 30
Independent of the grid 8 1 32
A lot of variation across householders

21. Cost
Constrained
Low upfront cost 34
Low running cost 16
Capitalises into sale price 3
Works as advertised 10
Easy to operate 7
Fits with house 12
Doesn’t disturb neighbors 5
Doesn’t disturb household 7
Independent of grid 6
% of participants 13%

22. Cost
Constrained Practical
Low upfront cost 34 10
Low running cost 16 18
Capitalizes into sale price 3 7
Works as advertised 10 13
Easy to operate 7 13
Fits with house 12 15
Doesn’t disturb neighbors 5 8
Doesn’t disturb household 7 9
Independent of grid 6 7
% of participants 13% 23%

23. Constrained Practical Investor
Low upfront cost 34 10 18
Low running cost 16 18 16
Capitalises into sale price 3 7 16
Works as advertised 10 13 10
Easy to operate 7 13 6
Fits with house 12 15 11
Doesn’t disturb neighbors 5 8 7
Doesn’t disturb household 7 9 10
Independent of grid 6 7 6
% of participants 13% 23% 17%

24. Constrained Practical Investor Considerate
Low upfront cost 34 10 18 18
Low running cost 16 18 16 10
Capitalizes into sale price 3 7 16 6
Works as advertised 10 13 10 11
Easy to operate 7 13 6 7
Fits with house 12 15 11 13
Doesn’t disturb neighbors 5 8 7 15
Doesn’t disturb household 7 9 10 16
Independent of grid 6 7 6 4
% of participants 13% 23% 17% 19%

25. Constrained Practical Investor Considerate Independent
Low upfront cost 34 10 18 18 15
Low running cost 16 18 16 10 12
Capitalizes into sale price 3 7 16 6 8
Works as advertised 10 13 10 11 9
Easy to operate 7 13 6 7 5
Fits with house 12 15 11 13 13
Disturbs neighbors 5 8 7 15 11
Disturbs household 7 9 10 16 11
Independent of grid 6 7 6 4 15
% of participants 13% 23% 17% 19% 28%

26. What does this imply for “helping people choose”
Cost-constrained group
aided by financial assistance
Practical group
benefit from independent testing and certification
Investor group
inspection and certification of the installation
Considerate group
aided by requirements for labelling of noise, emissions
Independent group
aided by technical information and innovation

27. To sum up…
There’s a great deal of variation out there
it’s glorious!
But it’s costly
retrofitting older houses is costly,
but so is the process of making good choices
which retrofits work best in our context?
which should we do first?
Helping households take the financial plunge is important
and so is helping them choose well

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