Preferences of homeowners for heat-pump leasing: Evidence from a choice experiment in France, Germany, and Switzerland

Abstract

While heat pumps are a promising solution for decarbonizing residential buildings, financial barriers often hinder their diffusion. Asset leasing – whereby service providers lease equipment and provide services in exchange for monthly payments – could help overcome some of the barriers to adoption. This study investigates homeowners' preferences for heat-pump leasing, examines their inclination to lease or purchase, and quantifies their willingness to pay for different services. Empirical insights are drawn from a discrete choice experiment conducted with 915 single-family house owners who undertook 9150 hypothetical leasing decisions in France, Germany, and Switzerland. Survey results show an interest in flexible, all-inclusive leasing offerings, especially in markets where heat pumps are at an early stage of diffusion. However, preferences for asset leasing differ between countries. German house owners are the most open to leasing and would on average be willing to pay up to three times more than their French counterparts to shield themselves against technical risk. Given the role asset leasing could play in decarbonizing residential heat and enhancing energy security, policy makers may wish to adapt policy incentives to account for these service-based offerings.