A choice experiment for testing the energy-efficiency mortgage as a tool for promoting sustainable finance

Abstract

The challenges currently facing the EU in the energy sector include increasing import dependence, limited diversification, high and volatile energy prices, decarbonization, and slow progress in energy efficiency. EU energy policy has provided a wide range of measures to achieve an integrated energy market and sustainability of the building sector. Various incentives and financial instruments have been promoted and financed by governments to help consumers in energy retrofit processes. These include direct investments and fiscal, financial, and market instruments. Public measures have been widely studied but private initiatives have not. In this study, the energy-efficiency mortgage (EEM) is investigated as a credit scheme to attract young people to a real estate market for sustainable buildings, characterized by high sale prices. A choice experiment (CE) was modelled to investigate the preferences of potential young buyers of a new home. The results of this exploratory survey showed an appreciation of the purchase of new A-rated properties according to the Energy Performance Certificate, compared to those that need to be retrofitted or not retrofitted. Consumers like the option of a home energy efficiency renovation being fully managed by a third party (i.e., following the one-stop shop model). The key appeal of energy efficiency for consumers ranges from its ability to support better energy management, to better property value management. The EEM seems to be a promising tool to stimulate investments in energy efficiency and to promote the accessibility and affordability of housing in the sustainable housing market. The results of this study can help private financial institutions to propose appropriate credit plans, which limit the risk of default by the borrower. They can also help public incentive policymakers to propose complementary instruments to EEM.

Feasibility analysis of the application of building automation and control system and their interaction with occupant behavior

“…estimate the WTP of consumers toward them (Bottero et al, 2019;Dell'Anna et al, 2022). To solve this issue, a proxy has been considered, to account for the consumer's WTP for smart devices capable of reducing energy consumption through the interaction with the user.…”

“…Despite these possible benefits, high level of BACS implementation is relatively limited, representing one of the reasons for their high costs of purchase and installation (Ippolito et al, 2014). In light of the above, it is important to investigate the economic feasibility of this retrofit measure (Felius et al, 2020c), and, also, households' attitude toward these investments (Bottero et al, 2019;Dell'Anna et al, 2022), in order to evaluate both impact and desirability of their widespread adoption. Particularly considering the economic feasibility, a wide range of co-impacts alongside the primary objective (consumption reduction) could be reached by energy efficiency measures, often defined as co-benefits (Becchio et al, 2017;Bisello et al, 2017;Ferreira & Almeida, 2015).…”