Can Free Information Really Accelerate Technology Diffusion?

Abstract

Significant environmental benefits are often associated with the rapid diffusion of new energy-saving technologies. Over the past decade, electric and gas utilities, as well as the federal government, have provided free technical information and, in some cases, direct cash subsidies, to owners of existing commercial buildings to stimulate investment in specific energy-saving technologies. Yet little is known about the effectiveness of the information component of these programs. Can information itself, without explicit cash subsidies, actually increase investment in new technologies? To examine these issues, a model of retrofit investment in high-efficiency lighting technologies is developed. Estimates are based on a sample of commercial buildings, rather than the more common comparison of program participants to a synthetic pairing with another population. The principal finding is that information programs appear to make a significant contribution to the diffusion of high-efficiency lighting in commercial office buildings. Additionally, there is some evidence that the programs are more effective in encouraging retrofits by those who have already invested in advanced lighting technologies than for first-time purchasers.