Information programs for technology adoption: the case of energy-efficiency audits

• Published in: Resource and energy economics Vol. 26; no. 1; pp. 27 - 50
• Main Authors: Anderson, Soren T, Newell, Richard G
• Format: Journal Article
• Language: English
• Published: Amsterdam Elsevier B.V 01-03-2004; Elsevier; Elsevier Sequoia S.A
• Series: Resource and Energy Economics
• Subjects: Applied sciences; Cost control; Economic models; Economic theory; Energy; Energy audits; Energy economics; Energy efficiency; Energy policy; Exact sciences and technology; General, economic and professional studies; Industrial plants; Information; Studies; Technology; Technology adoption; United States; North America; America; Technology adoption; Q48; O38; C25; Energy audits; Energy efficiency; Information; O33; Q41; Payback time; Energy conservation program; Energy conservation; Decision making; Econometric model; Selection criterion; Energy policy; Secondary sector; Cost analysis; Investment cost; Energy savings; Implementation
• ISSN: 0928-7655; 1873-0221
• DOI: 10.1016/j.reseneeco.2003.07.001

We analyze technology adoption decisions of manufacturing plants in response to government-sponsored energy audits. Overall, plants adopt about half of the recommended energy-efficiency projects. Using fixed effects logit estimation, we find that adoption rates are higher for projects with shorter paybacks, lower costs, greater annual savings, higher energy prices, and greater energy conservation. Plants are 40% more responsive to initial costs than annual savings, suggesting that subsidies may be more effective at promoting energy-efficient technologies than energy price increases. Adoption decisions imply hurdle rates of 50–100%, which is consistent with the investment criteria small and medium-size firms state they use.