Leasing vs. buying a heat pump: Survey shows homeowners may prefer leasing

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Scientists at the University of St.Gallen in Switzerland have investigated the preferences of single-family house owners and their inclination toward leasing or purchasing heat pumps in Switzerland, Germany, and France.

They conducted a discrete choice experiment (DCE), which is a quantitative approach commonly used in healthcare to elicit preferences from participants, to examine the preferences of households for heat pump leasing options via an online survey. “The questionnaires and DCE designs were pre-tested with 12 experts and house owners to verify their adequacy and intelligibility.”

Respondents were asked to provide an answer on the preferred leasing model and their preference between leasing and purchasing. “Once respondents had selected their preferred leasing option, we asked them in a second stage to imagine that they now also had the option to purchase the heat pump for a specific price, paid upfront. We explained that the purchasing price included the installation costs and a two-year warranty, but no maintenance,” the academics explained.

An unspecified market research institute conducted the market survey between February and March 2022, which involved 1,582 single-family house owners spread across the three countries considered in the study. The final sample includes data from 915 single-family house owners who answered on a total of 9,150 hypothetical heat-pump leasing decisions.

The survey showed that monthly lease payments and lease contracts are crucial factors in decision-making, and that homeowners tend to prefer all-inclusive leasing products with lower monthly payments.

“Their average willingness to pay for an all-inclusive package relative to a basic package that would only include the heat pump and installation is similar across countries,” the researchers said, adding that German and Swiss households seem to be willing to pay more than their French counterparts. “Heating specialists, local energy utilities, and heat pump manufacturers could consider providing – alone or in collaboration – lease offerings in which the heat pump, installation, yearly maintenance, and potential repairs and part replacement costs are all included.”

Their findings can be read in the study “Preferences of homeowners for heat-pump leasing: Evidence from a choice experiment in France, Germany, and Switzerland,” published in Energy Policy. “Further research could focus on elucidating the influence of the current energy crisis on households' preferences for heating services, including heat-pump leasing,” they concluded.

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