Decarbonising the rental housing market: An experimental analysis of tenants’ preferences for clean energy features of residential buildings

Abstract

End-use electrification has been identified as one of the most promising strategies for decarbonizing the building sector. While there is significant growth of distributed solar photovoltaics (PV), heat pumps and electric vehicles (EV) in many countries, the majority of this trend has been driven by high-income households, often owners of single-family homes. Further diffusion of clean energy technologies in buildings depends on addressing additional market segments, such as tenants who represent a large part of the population. We conducted a choice experiment with N = 1′005 Swiss tenants to investigate their preference for clean energy features when choosing an apartment. Inspired by the Theory-of-Planned-Behaviour, we tested the influence of Perceived Behavioral Control and Social Norms on respondents' preferences. We find that tenants express a positive willingness-to-pay for well-insulated apartments, and strongly prefer heat pumps over fossil heating. Furthermore, adding rooftop solar PV increases tenants' likelihood to choose an apartment, while an EV-charging-station is only preferred in combination with solar PV. 55.7% of tenants would also be willing to co-invest in rooftop PV. Our findings have important policy implications: Active involvement of tenants could be a key element of a just energy transition and opens opportunities for innovative business models.