Abstract:

“Learning by Doing: Contractors’ Learning in Heat Pump Installations”
Christopher Knittel* (Massachusetts Institute of Technology), Johnattan Ontiveros (Massachusetts Institute of Technology), Juan Palacios (Maastricht University), and Siqi Zheng (Massachusetts Institute of Technology)

This paper examines the role of contractors in the adoption of high-efficiency heat pumps in the residential sector, a critical building decarbonization technology in the energy transition of households. We compile a unique dataset that includes comprehensive information on the characteristics of installed equipment as well as the cost breakdown in around 14,000 heatpump installations, undertaken by 600 different installers between 2015 and 2019 in the state of Massachusetts (US). We document large systematic differences in installed capacity and costs across contractors, after controlling for a rich variety of home attributes. In addition, we document a significant learning effect in heat-pump installations, characterized by a reduction in the degree of oversizing installations as contractors accumulate more experience. An increase of 1% of the number of installations by a contractor is associated with a 0.03% reduction in installed capacity of heat pumps. This learning effect is more salient for the less complex installation tasks such as single-head heat pumps and those in the homes previously using natural gas heating systems.

*Denotes presenter