This study investigates the impact of energy efficiency measures installed through the Carbon Emission Reduction Target (CERT) and the Community Energy Saving Programme (CESP) on domestic gas and total energy consumptions. The recently released National Energy Efficiency Data-Framework (NEED) database is used to examine the changes in domestic gas and total energy consumptions for the dwellings in the sample relative to the changes in gas and total energy consumptions for a comparable control group in the year after installation. The results obtained from this difference-in-difference analysis confirm that observed energy consumption decreases significantly in dwellings following upgrades such as cavity wall insulation, loft insulation and a new efficient boiler. The single most effective energy efficiency measure when installed alone is found to be cavity wall insulation, reducing annual gas consumption by 10.5 % and annual total energy consumption by 8.0 % in the year following installation. Comparing bundles of different energy efficiency measures, we find that dwellings retrofitted with both cavity wall insulation and a new efficient boiler experience the largest reductions in annual gas and total energy consumptions of 13.3 and 13.5 %, respectively. This is followed by a mean annual reduction of 11.9 and 10.5 % in gas and total energy consumptions for dwellings with all three energy efficiency measures installed in the same year. Contrary to expectations, installing cavity wall insulation on its own is found to be more effective in reducing measured energy consumption than combining loft insulation and a new efficient boiler.
In this study, we examine the drivers of household energy consumption with a view towards gauging which households are particularly vulnerable to energy price risk. We specifically investigate the relative importance of household socioeconomic characteristics versus dwelling characteristics in explaining per capita gas consumption for space heating. The study draws upon a large random sample of households from the English Housing Survey (EHS) to understand the importance of, and interaction between, household and building characteristics. A multivariate OLS regression is used to identify the relative effects of various consumption drivers on gas used for space heating. The use of standardised coefficients allows for a discussion of the marginal contributions of each factor to energy consumption. The results show that variation in gas usage is largely determined by household socioeconomic characteristics rather than physical dwelling characteristics. This includes the significant influence of household characteristics such as composition (or type), size, employment status, and income. The main contribution of the study is to underline the relative importance of household socioeconomic characteristics over dwelling characteristics in explaining per capita energy consumption. The reported findings challenge the prevailing policy practice, which focusses mostly on dwelling characteristics.
Purpose-Improving the energy efficiency of the existing residential building stock has been identified as a key policy aim in many countries. This study reviews the extant literature on investment decisions in domestic energy efficiency and presents a model that is both grounded in microeconomic theory and empirically tractable. Design/methodology/approach-This study develops a modified and extended version of an existing microeconomic model to embed the retrofit investment decision in a residential property market context, taking into account tenants' willingness to pay and cost-reducing synergies. A simple empirical test of the link between energy efficiency measures and housing market dynamics is then conducted. Findings-The empirical data analysis for England indicates that where house prices are low, energy efficiency measures tend to increase the value of a house more in relative terms compared to higher-priced regions. Secondly, where housing markets are tight, landlords and sellers will be successful even without investing in energy efficiency measures. Thirdly, where wages and incomes are low, the potential gains from energy savings make up a larger proportion of those incomes compared to more affluent regions. This, in turn, acts as a further incentive for an energy retrofit. Finally, the UK government has been operating a subsidy scheme which allows all households below a certain income threshold to have certain energy efficiency measures carried out for free. In regions, where a larger proportion of households are eligible for these subsidies, we also expect a larger uptake. Originality/value-While the financial metrics of retrofit measures are by now well understood, most of the existing studies tend to view these investments in isolation, not as part of a larger bundle of considerations by landlords and owners of how energy retrofits might influence a property's rent, price and appreciation rate. In this paper, we argue that establishing this link is crucial for a better understanding of the retrofit investment decision.
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