Path dependency

Подпись: 54In some countries REHC is already widespread. This can be partially explained by existing path dependencies such as woody biomass used for district heating in Sweden. In countries where there is no history of district heating, then it would be more difficult to introduce a biomass district heating system because the paradigm shift from distributed heating systems would be unattractive for the current owners of conventional appliances. A shift could be even more difficult when there are no successful examples that planners can refer to; hence the value of demonstration plants even though their capital costs may be high.

Path dependency for solar thermal in countries such as Cyprus, Israel and Greece resulted from strong public support gained over the past decades through different policy instruments including awareness raising (Cyprus), regulation (Israel) and financial (Greece) (Piria, 2007). The resulting critical mass market resulted from trained installers, wide awareness by potential users, and marketing structures on the supply side. This resulted in self-sustaining markets that no longer need strong policy incentives.

Split incentives

In rental properties there is little incentive for the landlord to invest in efficient REHC technologies that would reduce on-going heating and cooling bills because these are carried by the lessee. Conversely, the lessee has little possibility to benefit from any incentives to invest in fixed equipment for a rental property because there is a risk of moving out before the end of the payback period.

Cost structure

REHC technologies may become more cost-efficient in the longer term but a current barrier can be the relatively high up-front costs of the installation. If the simple payback method is used to estimate the attractiveness of a REHC technology investment, it could seem less valuable than if the net-present – value method is used that takes into account any value created after the payback time.

Updated: October 27, 2015 — 12:08 pm