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Adoption of retrofit measures among home-owners in EU countries: The effects of access to capital and debt aversion

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  • Schleich, Joachim
  • Faure, Corinne
  • Meissner, Thomas

Abstract

Energy efficiency policies often involve low-interest loans for retrofit measures in private buildings; the main target of these loans are meant to be households with otherwise poor access to capital. However, such programs can only be successful if the targeted households also take up these loans. This paper stud-ies the relation between access to capital and debt aversion and the adoption of retrofit measures in European Union countries, employing a demographically representative household survey including about 6,600 homeowners in France, Germany, Italy, Poland, Romania, Spain, Sweden, and the United Kingdom. The findings suggest that debt aversion negatively affects the adoption of retro-fit measures by homeowners. In particular, debt-averse homeowners with poor access to capital are less likely to have adopted retrofit measures than non-debt-averse homeowners with poor access to capital. The findings further pro-vide evidence that low-interest loan programs should be targeted at younger homeowners with lower income and less formal education.

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  • Schleich, Joachim & Faure, Corinne & Meissner, Thomas, 2019. "Adoption of retrofit measures among home-owners in EU countries: The effects of access to capital and debt aversion," Working Papers "Sustainability and Innovation" S08/2019, Fraunhofer Institute for Systems and Innovation Research (ISI).
    • Handle: RePEc:zbw:fisisi:s082019
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    Cited by:

    1. Emily K. Schwartz & Moncef Krarti, 2022. "Review of Adoption Status of Sustainable Energy Technologies in the US Residential Building Sector," Energies, MDPI, vol. 15(6), pages 1-18, March.
    2. Fanghella, Valeria & Guetlein, Marie-Charlotte & Schleich, Joachim & Sebi, Carine, 2023. "Preferences on financing mechanisms for thermal retrofit measures in multi-owner buildings: A discrete choice experiment with landlords and owner-occupiers in France," Resource and Energy Economics, Elsevier, vol. 74(C).
    3. Akhatova, A. & Derkenbaeva, E. & van Leeuwen, E. & Kranzl, L. & Halleck Vega, S. & Hofstede, G.J., 2024. "Who invests in energy retrofits? Mining Dutch homeowners’ data," Energy Policy, Elsevier, vol. 189(C).
    4. Steffen Ahrens & Ciril Bosch-Rosa & Thomas Meissner, 2022. "Intertemporal consumption and debt aversion: a replication and extension," Journal of the Economic Science Association, Springer;Economic Science Association, vol. 8(1), pages 56-84, December.
    5. Schlindwein, L.F. & Montalvo, C., 2023. "Energy citizenship: Accounting for the heterogeneity of human behaviours within energy transition," Energy Policy, Elsevier, vol. 180(C).
    6. Thomas Meissner & David Albrecht, 2022. "Debt Aversion: Theory and Measurement," Papers 2207.07538, arXiv.org, revised Jul 2022.
    7. Schleich, Joachim & Gassmann, Xavier & Meissner, Thomas & Faure, Corinne, 2023. "Making the factors underlying the implicit discount rate tangible," Energy Policy, Elsevier, vol. 177(C).
    8. Lisa Hanna Broska & Stefan Vögele & Hawal Shamon & Inga Wittenberg, 2022. "On the Future(s) of Energy Communities in the German Energy Transition: A Derivation of Transformation Pathways," Sustainability, MDPI, vol. 14(6), pages 1-31, March.
    9. Schleich, Joachim & Tu, Gengyang & Faure, Corinne & Guetlein, Marie-Charlotte, 2021. "Would you prefer to rent rather than own your new heating system? Insights from a discrete choice experiment among owner-occupiers in the UK," Energy Policy, Elsevier, vol. 158(C).
    10. David Huckebrink & Valentin Bertsch, 2021. "Integrating Behavioural Aspects in Energy System Modelling—A Review," Energies, MDPI, vol. 14(15), pages 1-26, July.

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