The slow adoption of residential energy-efficiency retrofits continues to hamper the energy transition. We study incentives for adoption by proposing a model of optimal investment under uncertainty where the wealth-maximising agent has the option to delay. Stochastic portfolio returns and energy prices are taken into account. An extension of the model where the energy carrier is switched, e.g. from gas to electricity, is also considered. Exercise boundaries for the optimal stopping problem are estimated numerically for recent case studies of German buildings. Investment is generally not optimal at current energy prices and market conditions. Increasing correlation between gas and electricity prices erodes the value of technology switching. Comparative statics reveal that energy-efficiency investments become optimal at relatively lower energy prices as wealth, income, and savings behaviour increase, and portfolio drift and volatility decrease. Consequently, incentive to invest in retrofits is far more heterogeneous along wealth dimensions than standard discounted cash flow analyses suggest. An examination of retrofit subsidies demonstrates how free-riding by wealthier agents occurs when subsidies are not appropriately targeted. We show that the pursuit of economic efficiency in subsidy design might have regressive effects on the wealth distribution.

中文翻译：

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财富最大化和住宅能源效率改造：来自实物期权模型的见解


住宅能效改造的缓慢采用继续阻碍能源转型。我们通过提出一种在不确定性下进行最佳投资的模型来研究采用的激励措施，其中财富最大化代理人可以选择延迟。随机投资组合回报和能源价格被考虑在内。还考虑了能源载体切换的模型的扩展，例如从天然气到电力。对于最近的德国建筑物案例研究，对最佳停止问题的运动边界进行了数值估计。在当前的能源价格和市场条件下，投资通常不是最佳的。天然气和电力价格之间日益增强的相关性侵蚀了技术转换的价值。比较统计结果表明，随着财富、收入和储蓄行为的增加，以及投资组合漂移和波动性的降低，能源效率投资在相对较低的能源价格下成为最佳选择。因此，与标准的贴现现金流分析所表明的相比，投资改造的激励措施在财富维度上的异质性要大得多。对改造补贴的审查表明，当补贴没有适当针对时，较富有的代理人是如何搭便车的。我们表明，在补贴设计中追求经济效率可能会对财富分配产生倒退效应。