Willingness-to-pay for energy-saving retrofits of residential buildings and its influencing factors: the case of the Pearl River Delta, China
Abstract
In the 21st Century, the construction industry regards green building as an important breakthrough to achieve sustainable development, and energy-saving retrofits of residential buildings has been conducted globally with China no exception. In order to better understand consumers’ attitudes and willingness-to-pay (WTP) for green retrofits and identify the shortcomings of the industry’s development, this study designs a retrofit scheme and organizes a questionnaire survey to collect feedback of responds from the Pearl River Delta, China regarding their WTP for energy-saving retrofits of residential buildings and their decision factors. The study identifies a retrofit cost of $517.92 and found that 94.29% of respondents had the intention of green reconstruction. The results of a Pearson correlation analysis and one-way ANOVA show the professional background of respondents and their WTP to be negatively correlated, while education level, perceived value, perceived behavior control, and feelings of the surrounding reference group are positively correlated with participants’ expected inputs. Of all the factors considered, the level of education and feelings of the surrounding reference group influence budget most significantly. The findings will help property developers and the government to design better marketing strategies and launch corresponding policies, thereby promoting the development of the green building industry.
First published online 29 September 2022
Keyword : residential buildings, energy-saving retrofit, WTP, influencing factors, cost estimation, correlation analysis
How to Cite
Hongyang, L., Shuying, F., Skitmore, M., & Talebian, N. (2022). Willingness-to-pay for energy-saving retrofits of residential buildings and its influencing factors: the case of the Pearl River Delta, China. Technological and Economic Development of Economy, 28(6), 1684–1710. https://doi.org/10.3846/tede.2022.17582
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
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Lu, Q. (2020). Looking at the energy efficiency of green buildings in China from the development of near-zero energy buildings in Germany. In 2020 Paper Collection of International Conference on Green and Energy Efficient Building. Chinese Society for Urban Studies. China City Press.
Luo, P. C., & Zhu, W. (2016). A TPB model analysis of factors affecting urban residents’ willingness to live in senior housing estate. Journal of Xuchang University, 35(1), 112–116.
Ma, L. X. (2015). Building energy efficiency and work recommendations in Finland and France. In The 17th Annual Meeting of China Association for Science and Technology – Part 15 Proceedings of International Symposium on Technology Innovation and Investment and Financing of Emerging Green Industries.
Mac Uidhir, T., Rogan, F., Collins, M., Curtis, J., & Gallachóir, B. P. Ó. (2020). Improving energy savings from a residential retrofit policy: A new model to inform better retrofit decisions. Energy and Buildings, 209, 109656. https://doi.org/10.1016/j.enbuild.2019.109656
Masud, M. M., Junsheng, H., Akhtar, R., Al-Amin, A. Q., & Kari, F. B. (2015). Estimating farmers’ willingness to pay for climate change adaption: The case of the Malaysian agricultural sector. Environmental Monitoring and Assessment, 187(2), 38. https://doi.org/10.1007/s10661-014-4254-z
Ofek, S., & Portnov, B. A. (2020). Differential effect of knowledge on stakeholders’ willingness to pay green building price premium: Implications for cleaner production. Journal of Cleaner Production, 251, 119575. https://doi.org/10.1016/j.jclepro.2019.119575
Ozor, N., Garforth, C. J., & Madukwe, M. C. (2013). Farmers’ willingness to pay for agricultural extension service: evidence from Nigeria. Journal of International Development, 25(3), 382–392. https://doi.org/10.1002/jid.1849
Park, M., Hagishima, A., Tanimoto, J., & Chun, C. (2013). Willingness to pay for improvements in environmental performance of residential buildings. Building and Environment, 60, 225–233. https://doi.org/10.1016/j.buildenv.2012.10.017
Portnov, B. A., Trop, T., Svechkina, A., Ofek, S., Akron, S., & Ghermandi, A. (2018). Factors affecting homebuyers’ willingness to pay green building price premium: Evidence from a nationwide survey in Israel. Building and Environment, 137, 280–291. https://doi.org/10.1016/j.buildenv.2018.04.014
Rahman, M. M., Alam, K., Karim, R., & Islam, M. K. (2017). Willingness to pay for improved water supply: A policy implication for future water security. American Journal of Environmental and Resource Economics, 2(4), 116–122.
Sang, P. D., & Song, H. B. (2019). The purchase of healthy building for young residents a study based on TPB-CPV theory. Journal of Engineering Management, 33(02), 147–152.
Sehreen, F., Masud, M. M., Akhtar, R., Masum, M., & Ahmad, R. (2019). A contingent valuation approach to evaluating willingness to pay for an improved water pollution management system in Dhaka City, Bangladesh. Environmental Monitoring and Assessment, 191(7), 457. https://doi.org/10.1007/s10661-019-7595-9
The State Council of the People’s Republic of China. (2008). Regulations on energy saving for civil buildings.
Wang, J. J. Li, D. B., Xiong, Z. Z., Guo, X. Y., & Yuan, J. (2020). Technical system of livable reconstruction of existing residential buildings. Building Energy Efficiency, 48(10), 109–115.
Wang, L. K., & Yu, H. (2010). An exploration of energy-saving measures for residential buildings in the Pearl River Delta. Journal of Wuyi University (Natural Science Edition), 24(3), 67–71.
Wang, Y. L., Deng, Q. Q., & Li, D. Y. (2019). Optimization research on renovation of existing residential building envelope in cold area. New Building Materials, 46(12), 145–148+152.
Xu, G., & Ding, G. F. (2014). The practice of energy conservation in residential buildings in the UK and its enlightenment. Building Science, 30(10), 106–109.
Xu, Y. M. (2005). On the current condition and development of conservation of energy both in China and abroad. Journal of Xuzhou Institute of Technology, 3, 71–73.
Yang, J., & Li, H. Y. (2014). Study on demand factors system of green building based on the consumer willingness to pay. Construction Economy, 35(10), 104–108.
Yang, J. P., Fan, X. X., Song, J. Z. & Hu, Z. (2018). Analysis of the factors impacting on households’ willingness for green retrofit of existing residential building of Xi’an. Journal of Arid Land Resources and Environment, 32(5), 71–77. https://doi.org/10.13448/j.cnki.jalre.2018.143
Yang, P. J. (2017). Energy-saving renovation technology for existing buildings in hot summer and warm winter areas. Jiangxi Building Materials, 24, 60. https://doi.org/10.3969/j.issn.1006-2890.2017.24.049
Yu, P., Wu, P., & Yang, S. (2012). Statistics and analysis of energy consumption for state organ office buildings and large-scale public buildings in Guangdong Province. Guangdong Architecture Civil Engineering, 19(4), 30–32+36. https://doi.org/10.19731/j.gdtmyjz.2012.04.010
Zalejska-Jonsson, A. (2014). Stated willingness to pay and rational willingness to pay: Willingness to pay for green apartments in Sweden. Sustainable Cities and Society, 13, 46–56. https://doi.org/10.1016/j.scs.2014.04.007
Zhang, L., Cai, S. Y., Zheng, S. Q., & Lin, B. R. (2015). Influence of consumer characteristics on the willingness-to-pay for Green Housing. China Real Estate, 18, 23–31.
Zhang, R., Xu, P. P., & Lu, Y. P. (2018). Analysis of the comprehensive renovation of livability of existing residential buildings in hot summer and cold winter and hot summer and warm winter areas. Engineering Economy, 28(12), 61–65.
Zhang, R. H. (2011). Research on willingness to pay of the green building. Harbin Institute of Technology, Harbin, China.
Zhang, S., Wan, Y. L., Wang, P. B., & Cao, M. N. (2013). Study on existing residential building energy-saving reconstruction in Cold Region. Construction Technology, 42(S1), 488–490.
Zhao, H. J., Yan, L., & Ru, Z. P. (2016). Discussion on energy saving reconstruction of existing buildings in hot summer and warm winter area. Value Engineering, 35(18), 99–100.
Zheng, W. H. (2018). Current situation and contrast of building energy conservation at home and abroad. Refrigeration and Air Conditioning, 4, 134–137.
Zhong, X. C. (2017). An empirical study on Influencing Factors of consumer’s green house purchase intention. Shandong University of Science and Technology, Qingdao, China.
Zuo, J. H. (2017). The energy saving technology of existing residential buildings in the northern heating area. Shanxi Architecture, 43(27), 161–162.
Banfi, S., Farsi, M., Filippini, M., & Jakob, M. (2008). Willingness to pay for energy-saving measures in residential buildings. Energy Economics, 30(2), 503–516. https://doi.org/10.1016/j.eneco.2006.06.001
Building Energy Research Center of Tsinghua University. (2020). 2020 Annual Report on China Building Energy Efficiency. China Architecture & Building Press.
China State Council, & National Population Census Office. (2011). Major Figures on 2010 Population Census of China. China Statistics Press.
Deng, J. X., Shi, F., Shen, Z. Z., & Jing, W. (2016). Energy consumption simulation study of existing residential buildings in the subtropical region – a case study of seaside building in Xiamen City. Journal of Engineering Management, 30(06), 66–71.
Fu, X. Z., & Hou, Y. B. (2002) Building energy-saving technology in hot summer and warm winter areas in China (part 2). Building Technology, 5, 57–59.
Golbazi, M., El Danaf, A., & Aktas, C. B. (2020). Willingness to pay for green buildings: A survey on students’ perception in higher education. Energy & Buildings, 216, 109956. https://doi.org/10.1016/j.enbuild.2020.109956
He, C., Yu, S., Han, Q., & de Vries, B. (2019). How to attract customers to buy green housing? Their heterogeneous willingness to pay for different attributes. Journal of Cleaner Production, 230, 709–719. https://doi.org/10.1016/j.jclepro.2019.05.160
He, Q., Hossain, M. U., Ng, S. T., Skitmore, M., & Augenbroe, G. (2021). A cost-effective building retrofit decision-making model – Example of China’s temperate and mixed climate zones. Journal of Cleaner Production, 280(2), 124370. https://doi.org/10.1016/j.jclepro.2020.124370
Hu, W. L. (2014). The research on consumer’s willingness to pay and motivation for green building. Changsha University of Science & Technology, Changsha, China.
Huang, F., & Wang, J. (2013). Consumer acceptance behavior model and empirical research based on perceived value. Commercial Research, (06), 19–27.
Huang, H. L. (2014). Study on the influence factors of willingness to pay for green house in Lanzhou City. Lanzhou Jiaotong University, Lanzhou, China.
Karytsas, S., Polyzou, O., & Karytsas, C. (2019). Factors affecting willingness to adopt and willingness to pay for a residential hybrid system that provides heating/cooling and domestic hot water. Renewable Energy, 142, 591–603. https://doi.org/10.1016/j.renene.2019.04.108
Kim, H. W., Chan, H. C., & Gupta, S. (2007). Value-based adoption of Mobile Internet: An empirical investigation. Decision Support Systems, 43(1), 111–126. https://doi.org/10.1016/j.dss.2005.05.009
Koo, C. W., & Hong, T. H. (2018) Development of a dynamic incentive and penalty program for improving the energy performance of existing buildings. Technological and Economic Development of Economy, 24(2), 295–317. https://doi.org/10.3846/20294913.2016.1212741
Kwak, S. Y., Yoo, S. H., & Kim, C. S. (2013). Measuring the willingness to pay for tap water quality improvements: results of a contingent valuation survey in Pusan. Water, 5(4), 1638–1652. https://doi.org/10.3390/w5041638
Li, N. (2014). Technical and economic analysis of energy-saving renovation of existing residential buildings in hot summer and warm winter areas. Jiangxi Building Materials, (17), 96–97.
Li, T. T. (2012). Research on energy consumption and energy-saving potential of rural housings in Peral River Delta. South China University of Technology, Guangzhou, China.
Li, X. N. (2016). Study on the influence mechanism of consumers purchase intention for green residence. China University of Mining and Technology, Xuzhou, China.
Li, Z. W., Li, X. Y., Li, N., Jing, Q., & Li, C. D. (2020). Research on architectural design strategies in hot summer-warm winter areas aiming at energy conservation and indoor environmental quality improvement taking the Nanning Horticulture Expo Gardening Pavilion as an example. Architectural Journal, (S2), 95–99.
Liu, X. Q., Liu, L. B., Ding, Y. F., & Huang, R. (2020). Study on the energy-saving renovation performance of rural buildings based on three-dimensional greening in hot summer and warm winter areas. Journal of Xi’an University of Technology, 36(01), 33–40.
Liu, Y., Sun, X., Sun, T., & Liu, J. (2019). Promoting green residential buildings by increasing homebuyers’ willingness to pay: Evidence from Sino-Singapore Tianjin Eco-city in China. Journal of Cleaner Production, 238, 117884. https://doi.org/10.1016/j.jclepro.2019.117884
Lu, M. D. (2019). Residents’ willingness to pay for green buildings: Based on the Hangzhou survey. Economic & Trade Update, 16, 16–17.
Lu, Q. (2020). Looking at the energy efficiency of green buildings in China from the development of near-zero energy buildings in Germany. In 2020 Paper Collection of International Conference on Green and Energy Efficient Building. Chinese Society for Urban Studies. China City Press.
Luo, P. C., & Zhu, W. (2016). A TPB model analysis of factors affecting urban residents’ willingness to live in senior housing estate. Journal of Xuchang University, 35(1), 112–116.
Ma, L. X. (2015). Building energy efficiency and work recommendations in Finland and France. In The 17th Annual Meeting of China Association for Science and Technology – Part 15 Proceedings of International Symposium on Technology Innovation and Investment and Financing of Emerging Green Industries.
Mac Uidhir, T., Rogan, F., Collins, M., Curtis, J., & Gallachóir, B. P. Ó. (2020). Improving energy savings from a residential retrofit policy: A new model to inform better retrofit decisions. Energy and Buildings, 209, 109656. https://doi.org/10.1016/j.enbuild.2019.109656
Masud, M. M., Junsheng, H., Akhtar, R., Al-Amin, A. Q., & Kari, F. B. (2015). Estimating farmers’ willingness to pay for climate change adaption: The case of the Malaysian agricultural sector. Environmental Monitoring and Assessment, 187(2), 38. https://doi.org/10.1007/s10661-014-4254-z
Ofek, S., & Portnov, B. A. (2020). Differential effect of knowledge on stakeholders’ willingness to pay green building price premium: Implications for cleaner production. Journal of Cleaner Production, 251, 119575. https://doi.org/10.1016/j.jclepro.2019.119575
Ozor, N., Garforth, C. J., & Madukwe, M. C. (2013). Farmers’ willingness to pay for agricultural extension service: evidence from Nigeria. Journal of International Development, 25(3), 382–392. https://doi.org/10.1002/jid.1849
Park, M., Hagishima, A., Tanimoto, J., & Chun, C. (2013). Willingness to pay for improvements in environmental performance of residential buildings. Building and Environment, 60, 225–233. https://doi.org/10.1016/j.buildenv.2012.10.017
Portnov, B. A., Trop, T., Svechkina, A., Ofek, S., Akron, S., & Ghermandi, A. (2018). Factors affecting homebuyers’ willingness to pay green building price premium: Evidence from a nationwide survey in Israel. Building and Environment, 137, 280–291. https://doi.org/10.1016/j.buildenv.2018.04.014
Rahman, M. M., Alam, K., Karim, R., & Islam, M. K. (2017). Willingness to pay for improved water supply: A policy implication for future water security. American Journal of Environmental and Resource Economics, 2(4), 116–122.
Sang, P. D., & Song, H. B. (2019). The purchase of healthy building for young residents a study based on TPB-CPV theory. Journal of Engineering Management, 33(02), 147–152.
Sehreen, F., Masud, M. M., Akhtar, R., Masum, M., & Ahmad, R. (2019). A contingent valuation approach to evaluating willingness to pay for an improved water pollution management system in Dhaka City, Bangladesh. Environmental Monitoring and Assessment, 191(7), 457. https://doi.org/10.1007/s10661-019-7595-9
The State Council of the People’s Republic of China. (2008). Regulations on energy saving for civil buildings.
Wang, J. J. Li, D. B., Xiong, Z. Z., Guo, X. Y., & Yuan, J. (2020). Technical system of livable reconstruction of existing residential buildings. Building Energy Efficiency, 48(10), 109–115.
Wang, L. K., & Yu, H. (2010). An exploration of energy-saving measures for residential buildings in the Pearl River Delta. Journal of Wuyi University (Natural Science Edition), 24(3), 67–71.
Wang, Y. L., Deng, Q. Q., & Li, D. Y. (2019). Optimization research on renovation of existing residential building envelope in cold area. New Building Materials, 46(12), 145–148+152.
Xu, G., & Ding, G. F. (2014). The practice of energy conservation in residential buildings in the UK and its enlightenment. Building Science, 30(10), 106–109.
Xu, Y. M. (2005). On the current condition and development of conservation of energy both in China and abroad. Journal of Xuzhou Institute of Technology, 3, 71–73.
Yang, J., & Li, H. Y. (2014). Study on demand factors system of green building based on the consumer willingness to pay. Construction Economy, 35(10), 104–108.
Yang, J. P., Fan, X. X., Song, J. Z. & Hu, Z. (2018). Analysis of the factors impacting on households’ willingness for green retrofit of existing residential building of Xi’an. Journal of Arid Land Resources and Environment, 32(5), 71–77. https://doi.org/10.13448/j.cnki.jalre.2018.143
Yang, P. J. (2017). Energy-saving renovation technology for existing buildings in hot summer and warm winter areas. Jiangxi Building Materials, 24, 60. https://doi.org/10.3969/j.issn.1006-2890.2017.24.049
Yu, P., Wu, P., & Yang, S. (2012). Statistics and analysis of energy consumption for state organ office buildings and large-scale public buildings in Guangdong Province. Guangdong Architecture Civil Engineering, 19(4), 30–32+36. https://doi.org/10.19731/j.gdtmyjz.2012.04.010
Zalejska-Jonsson, A. (2014). Stated willingness to pay and rational willingness to pay: Willingness to pay for green apartments in Sweden. Sustainable Cities and Society, 13, 46–56. https://doi.org/10.1016/j.scs.2014.04.007
Zhang, L., Cai, S. Y., Zheng, S. Q., & Lin, B. R. (2015). Influence of consumer characteristics on the willingness-to-pay for Green Housing. China Real Estate, 18, 23–31.
Zhang, R., Xu, P. P., & Lu, Y. P. (2018). Analysis of the comprehensive renovation of livability of existing residential buildings in hot summer and cold winter and hot summer and warm winter areas. Engineering Economy, 28(12), 61–65.
Zhang, R. H. (2011). Research on willingness to pay of the green building. Harbin Institute of Technology, Harbin, China.
Zhang, S., Wan, Y. L., Wang, P. B., & Cao, M. N. (2013). Study on existing residential building energy-saving reconstruction in Cold Region. Construction Technology, 42(S1), 488–490.
Zhao, H. J., Yan, L., & Ru, Z. P. (2016). Discussion on energy saving reconstruction of existing buildings in hot summer and warm winter area. Value Engineering, 35(18), 99–100.
Zheng, W. H. (2018). Current situation and contrast of building energy conservation at home and abroad. Refrigeration and Air Conditioning, 4, 134–137.
Zhong, X. C. (2017). An empirical study on Influencing Factors of consumer’s green house purchase intention. Shandong University of Science and Technology, Qingdao, China.
Zuo, J. H. (2017). The energy saving technology of existing residential buildings in the northern heating area. Shanxi Architecture, 43(27), 161–162.