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Money, Comfort or Environment? Priorities and Determinants of Energy Efficiency Investments in Irish Households

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Abstract

Energy efficiency is an effective strategy to reduce household energy consumption. Investments in energy efficiency measures (EEMs) result in reduced energy bills and increased comfort for households, while also contributing to national environmental targets. This article examines an energy efficiency scheme in Ireland and investigates the factors that determine investments in energy efficiency measures and the motivations of Irish households to participate in energy saving programs and adopt EEMs. The paper investigates three key research questions: the determination of investments in EEMs, with special focus on motivations and their relative importance; the consistency of motivations over the course of the decision-making process; and the consistency of determinants and motivations for investments in EEMs across different measures. The paper studies the implementation of seven energy efficiency measures in residential houses throughout Ireland. Results indicate that the decision to ultimately apply and invest in EEMs is mainly driven by monetary or economic factors such as gains in energy savings and the private cost of the measures. Comfort gains are found to be a secondary factor and environmental benefits of EEMs are found to be of little concern when making investment decisions. Finally, we suggest focusing on providing information about the benefits of the EEMs on energy savings and improvements in comfort in order to increase the adoption of EEMs by households in Ireland.

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Notes

  1. The percentages are not required to add to 100 due to the possibility of multiple funding sources for a single measure.

  2. The full decision-making framework of investment in EEMs starts earlier than the first stage considered in this paper. The decision process may start with the decision to retrofit and the evaluation of the type of retrofit the house needs. The very early stages of the decision-making process to invest in EEMs unfortunately cannot be analysed in this study due to lack of detailed information regarding different factors influencing the decision of going or not through the investment process. Therefore, we start the analysis of the investment’s decision-making process from the application stage.

  3. This data is only available for households that have applied and obtained a grant from the authority. Unfortunately, we do not have the information on households that were not given a grant, and therefore, we cannot study their barriers or limitations.

  4. The measure-specific effects are not strong enough. Gender is shown to be significant only for the case of upgrades in gas boilers, in which case the parameter presented a negative sign, indicating that women are more likely to adopt improvements in gas boilers than men. The age of the householders is only significant for the case of adoption of internal wall insulation; however, the effect is very small (0.7%).

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Acknowledgments

Claudia Aravena is funded under Programme for Research in Third Level Institutions and co-funded under the European Regional Development Fund (ERDF). We would like to thank Jim Sheer and the Sustainable Energy Authority of Ireland for providing the data and information for the development of this research. We would also like to thank Sean Lyons, Geertje Schuitema, two anonymous referees, participants to the Bergen Economics of Energy and Environment Research Conference, the 38th IAEE International Conference and the seminar at the Center for Environmental and Resource Economic Policy at North Carolina State University for helpful comments on previous versions of this paper. The usual disclaimer applies.

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Authors and Affiliations

  1. Department of Economics, Trinity College Dublin, Dublin 2, Ireland

    Claudia Aravena & Eleanor Denny

  2. Facultad de Economia y Negocios, Universidad de Talca, Talca, Chile

    Andrés Riquelme

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  1. Claudia Aravena
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Correspondence to Claudia Aravena.

Appendix

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Table 7

Table 7 Grants per energy efficiency measure
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Aravena, C., Riquelme, A. & Denny, E. Money, Comfort or Environment? Priorities and Determinants of Energy Efficiency Investments in Irish Households. J Consum Policy 39, 159–186 (2016). https://doi.org/10.1007/s10603-016-9311-2

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