The Distribution of Energy Efficiency and Regional Inequality

Abstract

This paper studies the long-term distribution of energy-efficiency outcomes in the German residential sector. To uncover the underlying energy efficiency of buildings, we estimate the causal response of building-level heat energy demand to variability in heating degree days.We examine heterogeneity in temperature response using both panel fixed-effects and causal forests. Our results suggest that the distribution of energy-efficiency is not equitable in the West of Germany, with buildings located in the South attaining the best energy performance standards. Although the housing stock in the East is significantly older and thus less subject to building standards, they perform better than the West counterpart, likely as a result of large investments in retrofitting post-reunification. Finally, we show that the regional distribution of energy-efficiency reflects differences in heating needs -thus, the poorer energy performance of buildings in the North-West should be weighed against the warmer climatic zone.