How high are option values in energy-efficiency investments?

Authors :: Sanstad, Alan H.
Blumstein, Carl
Stoft, Steven E.
Source :: Energy Policy. Sept, 1995, Vol. 23 Issue 9, p739, 5 p.
Publication Year :: 1995
Abstract: Previous studies have proven that many consumers investing in energy efficiency gain high implicit discount rates that substantially exceed market interest rates for borrowing and saving. This observation has been explained by applying the concept of option value adapted from the finance theory. However, the concept does not provide adequate explanation for the pattern in energy-efficiency investments.