Energy efficient technology adoption in low-income households in the European Union – What is the evidence?

• Published in: Energy policy 2019-02, Vol.125, p.196-206
• Main Author: Schleich, Joachim
• Format: Article
• Language: English
• Subjects: Adoption; Adoption of innovations; Cost analysis; Econometrics; Economic models; Energy efficiency; Energy policy; Energy poverty; Falling; Financial support; Home ownership; Household appliances; Households; Income; Low cost; Low income groups; Luminaires; Poor homeowners; Public finance; Quartiles; Residential energy; Subsidies; Support schemes; Technology; Technology adoption; Technology utilization; Utilities
• ISSN: 0301-4215; 1873-6777
• DOI: 10.1016/j.enpol.2018.10.061

This paper studies the adoption of high-cost, medium-cost, and low-cost energy efficient technologies (EETs) by income categories in eight European Union countries, relying on demographically representative household surveys carried out simultaneously among about 15,000 households in France, Germany, Italy, Poland, Romania, Spain, Sweden, and the United Kingdom. The statistical-econometric analyses allow the effects of income to differ by income quartiles in each country. For high cost EETs such as retrofit measures, the findings suggest that homeowners falling into the lowest income quartile exhibit lower adoption propensities than those falling into the highest income quartile. These findings provide some support for policies targeting “poor homeowners”, particularly in lower-income countries with a high share of owner-occupiers such as Poland and Romania. Further, differences in adoption propensities across income quartiles also exist for medium- and low-cost EETs such as appliances and light bulbs. Finally, analyzing factors related to homeowners receiving financial support for retrofit measures from governments or utilities suggests that differences in implementation rates between the highest and lowest income quartile would likely have been higher without such support schemes in place. For the United Kingdom (but not for other countries) these schemes appeared to have had a progressive effect. •Adoption rates of energy efficient technologies vary strongly by income quartiles.•Lowest income quartiles exhibit lower adoption propensity for all technologies.•Financial support policies for retrofit measures should target “poor homeowners”.•Support policies for LEDs and appliances should target lowest income quartiles.