From furnaces to heat pumps: Assessing preference heterogeneity among Canadian homeowners

A key piece of the decarbonization challenge is shifting households from fossil-fuel heating systems to zero-emission alternatives such as electric heat pumps. In this study, we characterize the heterogeneity of heating system preferences among Canadian homeowners. Through latent class modelling informed by stated preference data (n = 2099), we identify four classes of homeowners, each differing in their valuation of home heating technology types and attributes, as well as individual socio-demographics. We find that approximately half of households are “air source heat pump-neutral”, valuing air source heat pumps and furnaces/boilers similarly when factors like costs are held equal. One quarter of households are “furnace-oriented”, displaying strong aversion to heat pumps, with high sensitivity to purchase prices and relatively low valuation of operational energy cost savings. Two other classes express very high valuation for heat pumps. One of these classes favors ground source heat pumps in particular, but interestingly, it is also highly averse to installation hassle. Our findings lead to a range of policy recommendations for promoting heat pump adoption across classes, including targeted incentives and strategic messaging; however, furnace-oriented households appear highly difficult to electrify, potentially requiring regulatory instruments to decarbonize.