Proof of concept that requiring energy labels for dwellings can induce retrofitting

Citation

Comerford DA, Lange I & Moro M (2018) Proof of concept that requiring energy labels for dwellings can induce retrofitting. Energy Economics, 69, pp. 204-212. https://doi.org/10.1016/j.eneco.2017.11.013

Abstract
How to induce households to install energy efficient technology remains a puzzle. Could an energy labeling requirement for residential real estate help? We propose that the salient color-letter grades on the English Energy Performance Certificate (EPC) served as targets, motivating vendors to invest in energy efficiency. To test our hypothesis we look to a random sample of over 16,000 homes in England. In the post-EPC data we find a cluster of homes with energy efficiency scores just above the D-grade threshold. This cluster was not present prior to the requirement, replicates in an independently-drawn random sample and is significantly larger amongst properties that can be identified as treated by the EPC requirement. We conclude that the EPC requirement induced investment, and hence that energy efficiency labels have potential to green the housing stock. We infer from our analysis how the design of the EPC could be altered to motivate greater investment in energy efficiency.

Keywords
Energy labels; Retrofitting; Selective attention; Residential energy use; Notches; Energy efficiency gap

Journal
Energy Economics: Volume 69

• Accepted Manuscript