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What Impedes Household Investment in Energy Efficiency and Renewable Energy?

Author

Listed:
  • Nadia Ameli

    (OECD)

  • Nicola Brandt

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 paper 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 paper 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. Quels sont les obstacles à l'investissement des ménages dans la rénovation énergétique et les énergies renouvelables ? La rénovation énergétique et les énergies renouvelables constituent un important moyen de réduire les émissions de gaz à effet de serre. Or, les ménages n’engagent pas un grand nombre d’investissements dans les énergies propres qui seraient rentables. Le présent document passe en revue différents arguments présentés dans les travaux publiés pour expliquer le sous-investissement constaté dans l’efficacité énergétique. Même si les investissements dans les technologies d'énergie renouvelable ne sont, généralement pas (encore) rentables, bon nombre de ses pilotes sont similaires à celles qui déterminent les investissements d'efficacité énergétique, et les deux types d'investissement sont donc évalués conjointement. Il présente aussi de nouveaux éléments sur les obstacles à l’investissement dans ce domaine, provenant de l’enquête de l'OCDE sur la politique de l’environnement et le comportement individuel. Enfin, il expose des solutions que les pouvoirs publics pourraient mettre en oeuvre pour aider à surmonter certains de ces obstacles.

Suggested Citation

  • Nadia Ameli & Nicola Brandt, 2015. "What Impedes Household Investment in Energy Efficiency and Renewable Energy?," OECD Economics Department Working Papers 1222, OECD Publishing.
  • Handle: RePEc:oec:ecoaaa:1222-en
    DOI: 10.1787/5js1j15g2f8n-en
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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

    behavioural failures; défaillances comportementales; défaillances de marché; energy efficiency gap; market failure;
    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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