Preferences for micro-cogeneration in Germany: Policy implications for grid expansion from a discrete choice experiment

Increasing the share of renewable energies requires an extension of grid capacity and additional storage possibilities. Although load shifting has been identified as a key instrument to relieve an overloaded grid, technologies that enable the decentralization of load shifting have hardly penetrated the electricity market. In this paper, a discrete choice experiment is applied to investigate preferences and willingness to pay values for micro-cogeneration, a technology that has huge potential to enhance load shifting, and at the same time reduce costs and CO2 emissions for heating. Our study includes homeowners as well as tenants to capture the overall market potential. Drawing from a sample of 412 adult Germans, several drivers of willingness to pay for micro-cogeneration are identified such as cost and CO2 saving potential, contract specifics and a feed-in tariff. The results show that most people would be willing to invest in micro-cogeneration technologies but non-monetary obstacles, such as limited institutional support, hinder investment on a larger scale. Several sources of preference heterogeneity are identified, giving rise to the development of a large variety of products and incentive structures.