Determinants of Technology Adoption in the Heating Transition (HEAT)

• Applicant: Professorin Kathrine von Graevenitz, Ph.D.
• Subject Area: Economic Policy, Applied Economics
• Term: since 2026
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 580318852

This project examines the determinants of technology adoption in the heating transition and the role of public policy. We combine quasi-experimental methods and structural modelling with a survey experiment to provide a comprehensive analysis of the determinants of technology adoption. We exploit a novel administrative data set on funding applications to the main federal subsidy scheme for renewable heating to understand the role of subsidy design. To understand the role of experts, we further collect large-scale survey data on the education, knowledge and beliefs of energy experts (advisors and skilled workers) who advise households on heating installations. The project is divided into four work packages. In the first, we collect and combine multiple different data sets from administrative sources, German statistical offices and publicly available information. We present descriptive statistics to map out the developments in the market for renewable heating over the last 20+ years. Based on this data, the following three work packages investigate the drivers of renewable heating adoption. Work Package 2 is dedicated to studying the impact of design features of public subsidy schemes on household investment decisions for heating systems using quasi-experimental econometric methods. Multiple amendments to the subsidy schemes over the last 25 years provide substantial variation in subsidy sizes, household and technology eligibility. Work Package 3 sets out to estimate a structural model of household demand for renewable heating systems, leveraging variation in the policy framework and energy prices to recover key parameters relevant to technology adoption. Building on the dynamic discrete choice model, counterfactual scenarios will be used to explore alternative policies such as a ban on fossil fuels and to recover welfare and distributional effects. Finally, Work Package 4 examines the role of energy experts in the heating transition. While households’ investment decisions are bound by ‘hard’ monetary factors, expert advice is a ‘soft’ factors that likely also significantly affects decision making. Past research has shown, that households tend to be poorly informed about energy related decisions. Seeking advice from energy experts – mandatory for various public subsidy schemes – may improve the ability of households to make informed decisions. Expert advice, however, is not necessarily neutral. Experts’ own beliefs and preferences may drive their recommendations, as has been shown in other domains, for instance, in financial advising. When the business model of the expert is based on the status quo, experts may act as gate keepers and reinforce beliefs, especially for technologies households are not familiar with. To investigate the role of experts, whether they act as agents of change or guardians of the status quo, we conduct a large-scale vignette experiment among energy experts in Germany.

• DFG Programme: Research Grants
• International Connection: Switzerland
• Cooperation Partner: Dr. Bettina Chlond