Household valuation of smart-home functionalities in Slovenia

• We estimated households' WTP for security and energy related smart functionalities.
• Households seem to see the opportunity for energy savings in home automation.
• Despite high interest in purchasing functionalities, stated WTP is rather low.
• Current market prices for smart home solutions may be too high to attract a larger share of households.

The paper analyses consumer willingness to invest in a smart home and attempts to establish willingness to pay for various smart-home functionalities among Slovenian households in 2013. The estimated results suggest that consumers positively perceive energy and security related smart-home functionalities, though willingness to pay (WTP) for any particular functionality is not found to be very high. In comparison to stated WTP, current market prices are mostly too high to expect higher penetration rates of smart home devices in the very near future. Household income, technology progressiveness, and energy conservation habits are found to positively influence purchases of smart-home functionalities.