Does Retrofitted Insulation Reduce Household Energy Use? Theory and Practice

Abstract

We analyze the household energy use impacts of a large-scale, universally available, subsidized retrofit insulation and clean heat scheme. Theory shows that the energy-saving effects of such schemes are ambiguous. Our difference-in-difference model of energy impacts resulting from each of insulation and clean heat treatment uses a sample of more than 12,000 treated houses. Retrofitted insulation treatment under the Warm Up New Zealand: Heat Smart program resulted in a statistically significant reduction in metered household energy consumption of almost 2%. Clean heat (heat pump) treatment resulted in increased electricity use but little change in total metered energy use other than at warmer temperatures, when heat pumps may have been used as air conditioners. Actual energy savings from insulation are approximately one-third of the modeled energy savings predicted by an engineering model.

The impact of domestic energy efficiency retrofit schemes on householder attitudes and behaviours

“…In monetary terms, the study calculated an overall benefitÀcost ratio of 3.0, with a net societal benefit of €3.12 billion, under a 5% discount rate and with a 7 year payback period (Clinch and Healy 2000). Analysis of a comparable scheme in New Zealand suggested a benefitÀcost ratio between 2.6 and 4.6 (Grimes et al 2012). These analyses suggest that retrofit schemes can have clear social and economic as well as environmental benefits (Clinch and Healy 2000;Goodacre, Sharples, and Smith 2002).…”

Estimating the willingness to pay for Warmer and Drier Homes

“…Improved heating devices were less highly rated than was the retro-fitting of insulation in the cost-benefit evaluation of Warm Up New Zealand: Heat Smart (Grimes et al, 2012). The results reported here suggest that public policy to promote the installation of improved heating devices may still be worthwhile.…”

“…Initial evaluations show that the insulation component contributes most to the positive costbenefit ratio of the New Zealand scheme (Grimes et al 2012). Similarly, in the United Kingdom there appears to be positive fiscal benefits from insulation schemes (Rosenow et al 2014).…”

Government failure and success: A trans-Tasman comparison of two insulation subsidy schemes

“…and Kennedy, 2009;Howden-Chapman et al, 2007, 2008. Subsequent evaluations confirmed that the program produced both energy savings (Grimes et al, 2016) and health benefits (Preval, 2012(Preval, , 2015Preval et al, 2017;Telfar Barnard et al, 2011). The program was subsequently continued as Warm Up New Zealand: Healthy Homes with reduced funding (EECA, 2013) and has more recently been continued under the incoming Labour Government.…”