Energy efficiency for all! How an innovative conditional subsidy on refurbishment could lead to enhanced access to efficient technologies

Panel: 2. Current energy efficiency policies: On stage and backstage

This is a peer-reviewed paper.

Authors:
Marie-Hélène Laurent, EDF - R&D Département ENERBAT, France
Benoit Allibe, CIRED, France
Dominique Osso, EDF-R&D Dpt ENERBAT, France

Abstract

Many energy policies targeting the residential sector aim at transforming the energy efficiency market for housing refurbishment and new construction. As a consequence, the markets for high efficiency technologies are expected to shift their balance from “high price – low volume” to “low price – high volume”. There has been success with some refurbishment actions in terms of penetration rate but not, currently, in terms of lower prices. Most retrofitting actions have evolved in a different way: prices did not decrease and/or volume remained quite low, mainly limiting the access to energy efficiency to wealthy households. Therefore, such a market can be considered as globally energy inefficient: despite the high efficiency of installed technologies; the total amount of energy savings remains low due to the limited volume. Considering the inertia of building stock and the ambitious European targets for energy conservation, new kinds of measures have to be quickly found and implemented to stimulate this specific market.

An innovative mechanism is proposed, based on a conditional subsidy (technology specific) depending on the sale price: for the same efficiency, the higher the price, the lower the level of subsidy. The impact of this incentive is studied by simulating French households’ choices between refurbishment options.

Results show that the conditional subsidy can lead to a rise in global efficiency of this market due to an increase in the penetration of energy efficiency retrofitting actions. The mechanism makes energy efficiency retrofitting actions more affordable for low and middle-income households while decreasing the amount of current subsidy. This study highlights the importance of considering the penetration potential of a technology (in a broad view, not only with respect to technology) and not just its unitary energy efficiency (per household or per equipment) to evaluate the energy benefits of a technology-specific energy policy.