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What Impedes Household Investment in Energy Efficiency and Renewable Energy?

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  • Ameli, Nadia
  • Brandt, Nicola

Abstract

Energy efficiency and renewable energy technologies provide important opportunities to reduce greenhouse gas emissions. However, households fail to take up many clean energy investments that are cost-effective. This article reviews different explanations for apparent underinvestment in energy efficiency that have been put forward in the literature. While investments in renewable energy technologies are typically not (yet) profitable, many of its drivers are similar to those that determine energy efficiency investments, and the two types of investment are therefore assessed jointly. The article also provides new evidence regarding barriers to investment in energy efficiency based on the OECD Survey on Household Environmental Behaviour and Attitudes. Finally, policy solutions that would help overcome some of these barriers are also presented.

Suggested Citation

  • Ameli, Nadia & Brandt, Nicola, 2015. "What Impedes Household Investment in Energy Efficiency and Renewable Energy?," International Review of Environmental and Resource Economics, now publishers, vol. 8(1), pages 101-138, May.
    • Handle: RePEc:now:jirere:101.00000067
    DOI: 10.1561/101.00000067
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    Cited by:

    1. Trotta, Gianluca, 2018. "Factors affecting energy-saving behaviours and energy efficiency investments in British households," Energy Policy, Elsevier, vol. 114(C), pages 529-539.
    2. Xu, Deyi & Sheraz, Muhammad & Hassan, Arshad & Sinha, Avik & Ullah, Saif, 2022. "Financial development, renewable energy and CO2 emission in G7 countries: New evidence from non-linear and asymmetric analysis," Energy Economics, Elsevier, vol. 109(C).
    3. Marlena Piekut, 2021. "The Consumption of Renewable Energy Sources (RES) by the European Union Households between 2004 and 2019," Energies, MDPI, vol. 14(17), pages 1-31, September.
    4. Shafiullah, Muhammad & Miah, Mohammad Dulal & Alam, Md Samsul & Atif, Muhammad, 2021. "Does economic policy uncertainty affect renewable energy consumption?," Renewable Energy, Elsevier, vol. 179(C), pages 1500-1521.
    5. Hansjörg Drewello, 2022. "Towards a Theory of Local Energy Transition," Sustainability, MDPI, vol. 14(18), pages 1-20, September.
    6. Jeroen van der Heijden, 2017. "Eco-financing for low-carbon buildings and cities: Value and limits," Urban Studies, Urban Studies Journal Limited, vol. 54(12), pages 2894-2909, September.
    7. Kevin Ankney, 2021. "Do Credit Constraints Explain the Energy Efficiency Gap? Evidence from the U.S. New Vehicle Market," Working Papers gueconwpa~21-21-17, Georgetown University, Department of Economics.
    8. Enrica De Cian & Filippo Pavanello & Teresa Randazzo & Malcolm Mistry & Marinella Davide, 2019. "Does climate influence households' thermal comfort decisions?," Working Papers 2019:02, Department of Economics, University of Venice "Ca' Foscari".
    9. Brent, Daniel A. & Ward, Michael B., 2018. "Energy efficiency and financial literacy," Journal of Environmental Economics and Management, Elsevier, vol. 90(C), pages 181-216.
    10. Roberts, M.B. & Bruce, A. & MacGill, I., 2019. "Opportunities and barriers for photovoltaics on multi-unit residential buildings: Reviewing the Australian experience," Renewable and Sustainable Energy Reviews, Elsevier, vol. 104(C), pages 95-110.
    11. Theofano Fotiou & Pantelis Capros & Panagiotis Fragkos, 2022. "Policy Modelling for Ambitious Energy Efficiency Investment in the EU Residential Buildings," Energies, MDPI, vol. 15(6), pages 1-29, March.
    12. Joaquín Fuentes-del-Burgo & Elena Navarro-Astor & Nuno M. M. Ramos & João Poças Martins, 2021. "Exploring the Critical Barriers to the Implementation of Renewable Technologies in Existing University Buildings," Sustainability, MDPI, vol. 13(22), pages 1-24, November.

    More about this item

    Keywords

    Energy efficiency gap; market failures; behavioural failures;
    All these keywords.

    JEL classification:

    • Q38 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Government Policy (includes OPEC Policy)
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

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