Energy Supply Contracting Adoption: Empirical Evidence from the Swiss Market

Energy supply contracting consisting in outsourcing energy-related services is considered as a promising
tool to induce investment in energy efficiency and renewable technologies. Yet, energy contracting
markets grow slowly and Switzerland is lagging behind. In order to assess whether the potentials are
under-exploited, the determinants of energy supply contracting adoption are assessed using a random
effects probit model on a dataset of 2,003 accepted and rejected contracts in Switzerland. Results
show that the advantages of risk sharing and economies of scale brought by contracting as well as
trust towards the supplier and the technology seem determining in the client's choice. The number of
interlocutors involved, inducing higher expected adaptation costs, impacts negatively adoption. Less
specific contracts involving residential or new buildings are more likely to be signed. The results imply
that in order to fully exploit the potentials of contracting, a priority is to clarify to which extent owners
can transfer the costs onto the tenants. Information campaigns are still needed to reduce the lack of
confidence in energy renewable technologies. This study also provides the suppliers with guidelines to
better exploit the market.