Highly educated home owners with a high income favour geothermal heat

According to the doctoral dissertation of Anna Sahari, the education and previous experience of house ownership have a major impact on the choice of heating technology when building a new detached house.

Only 4% of Finnish detached houses currently use ground source heat pumps; however, the number has increased threefold over a period of ten years. The share of geothermal heating could be higher. According to an upcoming doctoral dissertation in Economics, ground source heat pumps would be a viable investment for most home builders, when examined from a purely economic perspective.

In her doctoral dissertation in Economics, Anna Sahari discusses the choice of a heating system in new detached houses built during 2000–2011. Sahari examines how household variables, such as the income, education and age of the home owner, correlate with the choice of heating technology, and how sensitive the investment decisions of Finnish households are to electricity prices.

The income level, education and previous experience of house ownership have a significant impact on the choice of a heating system. Geothermal heating is often chosen by home owners with high education and income level. Those with previous experience of house ownership, on the other hand, were more likely to choose direct electric heating.

Costs are not the only basis for choosing a heating system. Sahari’s research does, however, indicate that some of the households that know about the low operating costs of ground source heat pumps still choose another system, making the decision based on limited credit or a lack of more detailed information.   

“The probability of choosing a ground source heat pump also decreases with an increase in the number of family members. We may deduce that incentives targeted at low-income families with children and households with no higher education could be useful, if a more frequent adoption of geothermal heating is the objective”, Sahari says.

“From the perspective of an improved energy-efficiency of households, renovation of old houses of course holds the largest potential for using ground source heat pumps. One fifth of the total of more than one million Finnish detached houses still use oil heating, and roughly the same number use wood heating”, Sahari explains.  

Sahari’s dissertation is based on Finnish registry data that includes nearly all new detached houses built between 2000 and 2011, linked to information of the house owner and local electricity prices. The extensive and detailed data allows the statistical examination of the correlation of an individual factor to the investment decision.
The doctoral dissertation by Anna Sahari, “Essays on Households' Technology Choices and Long-Term Energy Use”, will be publicly examined at the Aalto University School of Business on 5 May 2017.

The defence of the dissertation will be held in the Chydenia building (address: Runeberginkatu 22-24, Helsinki, Finland), room H-324, starting at 12 noon. Professor Rauli Svento from the University of Oulu will serve as the Opponent and Professor Matti Liski from the Aalto University School of Business as the Custos.

Further information:
Anna Sahari, Researcher, +358 295 519 511, [email protected]