| Abstract |
This paper examines the effects of capital stock, longevity and conversion costs on individuals choices of residential heating systems. Market penetration of geothermal energy is seen to be a function of the age of existing conventional systems, the relative efficiencies of geothermal and conventional systems and the costs of converting from one system to another. Sizeable difference in efficiency (60% or more) may be necessary to cover capital losses and hookup costs attendant to conversion. A schedule of incentive payments necessary to induce households to convert, even where efficiency differentials do not so dictate, is also derived and calculated. |