IDEAS home Printed from https://ideas.repec.org/p/sru/ssewps/2018-05.html
   My bibliography  Save this paper

Reorienting Finance Towards Energy Efficiency: The Case of UK Housing

Author

Listed:
  • Noam Bergman

    (SPRU - Science Policy Research Unit, University of Sussex, Brighton, BN1 9SL, UK)

  • Tim Foxon

    (SPRU - Science Policy Research Unit, University of Sussex, Brighton, BN1 9SL, UK)

Abstract

This paper examines the challenges associated with stimulating large-scale investment in energy efficiency and demand management measures, using residential energy efficiency-improving retrofits in the UK as a case study. We consider how issues of energy policy, consumer choice and financial systems intersect, drawing on recent literature including energy policy documents and research reports, and on interviews with stakeholders from the finance sector, energy efficiency practitioners and more. We suggest that following the withdrawal of the Green Deal, there is a need to reconsider the framing of policy for household energy efficiency improvements, and examine three potential aspects of a new framing: energy efficiency as infrastructure; new business and financing models for energy efficiency provision; and decentralised financing institutions for energy efficiency investment This would require a long-term commitment from government on energy efficiency, and a need to ensure that projects are attractive and investable from both householders and investors’ perspectives. We conclude that there are important roles for government in any large scale initiative for energy efficient retrofitting of UK homes, even if the mechanisms are market based. These includes signalling long-term policy consistency and reducing risks for financial investment, and intermediating between finance and energy efficiency projects.

Suggested Citation

  • Noam Bergman & Tim Foxon, 2018. "Reorienting Finance Towards Energy Efficiency: The Case of UK Housing," SPRU Working Paper Series 2018-05, SPRU - Science Policy Research Unit, University of Sussex Business School.
    • Handle: RePEc:sru:ssewps:2018-05
    as

    Download full text from publisher

    File URL: https://www.sussex.ac.uk/webteam/gateway/file.php?name=2018-05-swps-bergman-and-foxon.pdf&site=25
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Gouldson, Andy & Kerr, Niall & Millward-Hopkins, Joel & Freeman, Mark C. & Topi, Corrado & Sullivan, Rory, 2015. "Innovative financing models for low carbon transitions: Exploring the case for revolving funds for domestic energy efficiency programmes," Energy Policy, Elsevier, vol. 86(C), pages 739-748.
    2. Huszár, Zsuzsa R. & Tan, Ruth S.K. & Zhang, Weina, 2017. "Do short sellers exploit industry information?," Journal of Empirical Finance, Elsevier, vol. 41(C), pages 118-139.
    3. Marchand, Robert D. & Koh, S.C. Lenny & Morris, Jonathan C., 2015. "Delivering energy efficiency and carbon reduction schemes in England: Lessons from Green Deal Pioneer Places," Energy Policy, Elsevier, vol. 84(C), pages 96-106.
    4. Sorrell, Steve, 2015. "Reducing energy demand: A review of issues, challenges and approaches," Renewable and Sustainable Energy Reviews, Elsevier, vol. 47(C), pages 74-82.
    5. Geller, Howard & Harrington, Philip & Rosenfeld, Arthur H. & Tanishima, Satoshi & Unander, Fridtjof, 2006. "Polices for increasing energy efficiency: Thirty years of experience in OECD countries," Energy Policy, Elsevier, vol. 34(5), pages 556-573, March.
    6. Raffaele Della Croce & Fiona Stewart & Juan Yermo, 2011. "Promoting Longer-Term Investment by Institutional Investors: Selected Issues and Policies," OECD Journal: Financial Market Trends, OECD Publishing, vol. 2011(1), pages 145-164.
    7. Stephen Hall & Timothy J Foxon & Ronan Bolton, 2017. "Investing in low-carbon transitions: energy finance as an adaptive market," Climate Policy, Taylor & Francis Journals, vol. 17(3), pages 280-298, April.
    8. Mazzucato, Mariana & Semieniuk, Gregor, 2018. "Financing renewable energy: Who is financing what and why it matters," Technological Forecasting and Social Change, Elsevier, vol. 127(C), pages 8-22.
    9. Webber, Phil & Gouldson, Andy & Kerr, Niall, 2015. "The impacts of household retrofit and domestic energy efficiency schemes: A large scale, ex post evaluation," Energy Policy, Elsevier, vol. 84(C), pages 35-43.
    10. Uyarra, Elvira & Shapira, Philip & Harding, Alan, 2016. "Low carbon innovation and enterprise growth in the UK: Challenges of a place-blind policy mix," Technological Forecasting and Social Change, Elsevier, vol. 103(C), pages 264-272.
    11. Wüstenhagen, Rolf & Menichetti, Emanuela, 2012. "Strategic choices for renewable energy investment: Conceptual framework and opportunities for further research," Energy Policy, Elsevier, vol. 40(C), pages 1-10.
    12. Yu, Honghai & Fang, Libing & Du, Donglei & Yan, Panpan, 2017. "How EPU drives long-term industry beta," Finance Research Letters, Elsevier, vol. 22(C), pages 249-258.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Maria Savona, 2018. "Industrial policy for a Europeanindustrial renaissance. A few reflections," SPRU Working Paper Series 2018-07, SPRU - Science Policy Research Unit, University of Sussex Business School.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Brown, Donal & Sorrell, Steve & Kivimaa, Paula, 2019. "Worth the risk? An evaluation of alternative finance mechanisms for residential retrofit," Energy Policy, Elsevier, vol. 128(C), pages 418-430.
    2. Sarah Hafner & Olivia James & Aled Jones, 2019. "A Scoping Review of Barriers to Investment in Climate Change Solutions," Sustainability, MDPI, vol. 11(11), pages 1-19, June.
    3. Nadia Ameli & Paul Drummond & Alexander Bisaro & Michael Grubb & Hugues Chenet, 2020. "Climate finance and disclosure for institutional investors: why transparency is not enough," Climatic Change, Springer, vol. 160(4), pages 565-589, June.
    4. Marc Ringel & Saranda Mjekic, 2023. "Analyzing the Role of Banks in Providing Green Finance for Retail Customers: The Case of Germany," Sustainability, MDPI, vol. 15(11), pages 1-24, May.
    5. Alessandro Vercelli & Eric Clark & Andrew Gouldson, 2016. "Finance and Sustainability Synthesis Report of WP7," Working papers wpaper166, Financialisation, Economy, Society & Sustainable Development (FESSUD) Project.
    6. Dragomirescu-Gaina, Catalin & Galariotis, Emilios & Philippas, Dionisis, 2021. "Chasing the ‘green bandwagon’ in times of uncertainty," Energy Policy, Elsevier, vol. 151(C).
    7. Polzin, Friedemann & Sanders, Mark, 2020. "How to finance the transition to low-carbon energy in Europe?," Energy Policy, Elsevier, vol. 147(C).
    8. Bhatnagar, S. & Sharma, D., 2022. "Evolution of green finance and its enablers: A bibliometric analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 162(C).
    9. Copiello, Sergio, 2017. "Building energy efficiency: A research branch made of paradoxes," Renewable and Sustainable Energy Reviews, Elsevier, vol. 69(C), pages 1064-1076.
    10. Pereira, Guillermo Ivan & Niesten, Eva & Pinkse, Jonatan, 2022. "Sustainable energy systems in the making: A study on business model adaptation in incumbent utilities," Technological Forecasting and Social Change, Elsevier, vol. 174(C).
    11. Drivas, Kyriakos & Rozakis, Stelios & Xesfingi, Sofia, 2019. "The effect of house energy efficiency programs on the extensive and intensive margin of lower-income households’ investment behavior," Energy Policy, Elsevier, vol. 128(C), pages 607-615.
    12. Elie, Luc & Granier, Caroline & Rigot, Sandra, 2021. "The different types of renewable energy finance: A Bibliometric analysis," Energy Economics, Elsevier, vol. 93(C).
    13. Gregor Semieniuk & Emanuele Campiglio & Jean‐Francois Mercure & Ulrich Volz & Neil R. Edwards, 2021. "Low‐carbon transition risks for finance," Wiley Interdisciplinary Reviews: Climate Change, John Wiley & Sons, vol. 12(1), January.
    14. Costantini, Valeria & Crespi, Francesco & Paglialunga, Elena & Sforna, Giorgia, 2020. "System transition and structural change processes in the energy efficiency of residential sector: Evidence from EU countries," Structural Change and Economic Dynamics, Elsevier, vol. 53(C), pages 309-329.
    15. Curtin, Joseph & McInerney, Celine & Ó Gallachóir, Brian, 2017. "Financial incentives to mobilise local citizens as investors in low-carbon technologies: A systematic literature review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 75(C), pages 534-547.
    16. Yoon, Jungsub & Oh, Yoonhwan & Lee, Jeong-Dong, 2017. "The impact of policy consistency on technological competitiveness: A study on OECD countries," Energy Policy, Elsevier, vol. 108(C), pages 425-434.
    17. Bogdan Klepacki & Barbara Kusto & Piotr Bórawski & Aneta Bełdycka-Bórawska & Konrad Michalski & Aleksandra Perkowska & Tomasz Rokicki, 2021. "Investments in Renewable Energy Sources in Basic Units of Local Government in Rural Areas," Energies, MDPI, vol. 14(11), pages 1-17, May.
    18. Corrocher, Nicoletta & Cappa, Elisabetta, 2020. "The Role of public interventions in inducing private climate finance: An empirical analysis of the solar energy sector," Energy Policy, Elsevier, vol. 147(C).
    19. Xun Liu & Xiaoliang Yu & Simon Gao, 2019. "A quantitative study of financing efficiency of low‐carbon companies: A three‐stage data envelopment analysis," Business Strategy and the Environment, Wiley Blackwell, vol. 28(5), pages 858-871, July.
    20. Zhanna A. Mingaleva & Maria V. Sigova, 2022. "Financial Aspects of the Implementation of the Fourth Energy Transition," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 5, pages 43-58, October.

    More about this item

    Keywords

    energy efficiency; energy policy; green finance; demand side management (DSM); infrastructure;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sru:ssewps:2018-05. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: University of Sussex Business School Communications Team (email available below). General contact details of provider: https://edirc.repec.org/data/spessuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.