Psychological, social and financial barriers to energy efficiency – PENNY

Energy efficiency improvements is one of the three binding targets set in the 2030 Framework for climate and energy. Regulatory approaches and information measures have been extensively applied to improve energy efficiency, along with substantial public resources being invested in research and development for energy-efficient technologies. However, energy efficiency depends not only on the availability of cheap technologies or on policy interventions, but it is largely influenced by behavioural choices of users. Big challenges remain in the process to achieve energy efficiency targets, despite consumers being aware that improvements in energy efficiency are crucial, and energy efficiency policies offering the dual opportunity to save money and reduce the negative externalities that energy use brings.

PENNY aims at improving our understanding on behavioural mechanisms in energy efficiency, following an interdisciplinary and broad behavioural science approach. The project will provide an empirical and numerical assessment of the psychological, social, economic and financial factors that influence energy efficiency in the residential and industry sectors. By paring with energy utilities and retailers in different European countries, the project will conduct scientific experiments through Randomized Controlled Trial (RCT), which will enhance the design of policies aiming at maximizing energy efficient behaviors. RCT is the gold standard to test and refine policy interventions, because it is the most rigorous way of determining whether a cause-effect relation exists between a policy intervention and the desired outcome. The project will use novel data from different European countries to take into consideration institutional and political factors. The project will analyze consumers’ behavior related to both energy use and the adoption of energy efficient products. Finally, by means of energy-economy models, PENNY will provide improved estimates of the proposed EU 2030 policies. It will also allow assessing to what extent energy efficiency policies would allow strengthening the pledges recently made in the Paris Climate agreement.