Residential energy efficient device adoption in South Africa

In recent years there has been a major drive for the adoption of energy efficient devices in the residential sector of South Africa. The public utility company has introduced incentives for solar and heat pump water heaters, and has begun a residential mass rollout program, in order to encourage this adoption. In this paper we attempt to evaluate a consumer’s decision when purchasing energy efficient devices in order to determine whether current incentives are focused towards the technologies that consumers are seeking. Since the adoption of energy efficient devices is a purchasing decision by the consumer, we created a Hierarchical Decision Model (HDM) in order to understand this decision. We created two scenarios in order to analyze the model, one without incentives from the utility, and one with incentives. We established that the addition of incentives for heat pump water heaters and solar water heaters shifted the preference of these technologies above the other technologies, possibly justifying the large investments in the 2010/2011 financial period. This model could be used to give insight into the incentive structure for a utility company introducing new technologies to the market. Additionally, if a company wants to encourage the adoption of a specific energy efficient technology, it could use the model to determine how it is positioned against other technologies and adjust pricing, incentives, and investments into the research and development of the device.