Translating consumer choice data into policies that encourage smart choices
The EU is targeting an energy efficiency increase of at least 32.5 % by 2030, meaning reducing energy input required by about one third for the same output. In 2014, buildings accounted for 39 % of the EU’s final energy consumption and residential ones for the majority of that, so engaging consumers to modify their choices and behaviours could be a game changer. The EU-funded CHEETAH project has minimised the guesswork in the design of residential energy efficiency policy with highly targeted and detailed choice experiments in 18 000 households in 8 EU countries.
Sharpening the focus on consumer cost-benefit rationale
CHEETAH got a head start on the design of its survey thanks to valuable outcomes from its sister project BRISKEE. Ending in 2017, BRISKEE focused on household preferences and behaviours and, to a lesser extent, using those to develop reactive policy interventions. In a complementary way, CHEETAH set out to understand how policy interventions break down barriers to energy efficient consumer choices to foster tailored proactive policymaking. The project exploited quantitative stated preference discrete choice experiments (DCEs) that ask people to choose amongst alternatives with various product and/or policy attributes. Project coordinator Barbara Schlomann of Fraunhofer Institute for Systems and Innovation Research (Fraunhofer ISI) explains: “CHEETAH’s DCEs allowed us to estimate the value to consumers of multiple attributes of a product (e.g. price, energy costs and warranty) and also of related policies (e.g. subsidies or energy labels). In addition, statistically analysing the DCEs enabled calculation of willingness to pay (WTP) for certain attributes, and thus assessment in a scientifically rigorous way of the relative importance of individual attributes to product choices. CHEETAH also analysed the relationship between WTP and socioeconomic factors.”
From survey results to macroeconomic insight and energy policy
The household survey data were used in energy models of residential buildings and appliances to evaluate the influence of policies on total energy demand. The energy demand outcomes were then incorporated into the AsTra macro-economic model to predict the effects of energy policies on the economy. Analyses demonstrated that effective policies reflect national, cultural and socioeconomic differences and transparently explain long-term costs and benefits. Regarding household appliances, implementing ecodesign requirements is very inexpensive relative to resultant energy savings; enhancing this is the most effective policy, with ecodesign and labelling capable of delivering significant savings by 2030. Significant energy savings in the residential heating sector can only be achieved with building insulation projects, requiring ambitious renovation programmes and large capital investments. Education and financial incentives will not be enough to encourage such investment; binding measures will be required. Schlomann summarises: “Implementing the DCE results in energy-economic models has improved the models’ resolution and predictive power, facilitating the design of more effective energy efficiency policies for the present and the future, particularly in the context of the European Green Deal.” Thanks to CHEETAH, the EU is sprinting towards its energy efficiency goals with a clear target in sight.
Keywords
CHEETAH, energy, consumer, policies, policy, household, energy efficiency, survey, residential, DCE, appliances, BRISKEE, WTP, ecodesign, AsTra, European Green Deal