Report

Teaser, summary, work performed and final results

Periodic Reporting for period 1 - PENNY (Psychological, social and financial barriers to energy efficiency)

Teaser

Energy saving through energy efficiency is crucially important as it contributes to reductions in greenhouse gas (GHG) emissions, to achieve a more competitive, secure and sustainable energy system, and is an important means to save money. However, energy efficiency depends...

Summary

Energy saving through energy efficiency is crucially important as it contributes to reductions in greenhouse gas (GHG) emissions, to achieve a more competitive, secure and sustainable energy system, and is an important means to save money. 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. The primary goal of the project PENNY is to provide an empirical and numerical assessment of the psychological, social, economic and financial factors that influence energy efficiency in the residential and industry sectors.

The project aims to provide major advancements on the state of the art related to consumer behaviour in the domain of energy efficiency in order to improve the design of future energy efficiency policies. The project tests interventions on consumer behaviour in collaboration with energy industries in several EU countries, using state of art methods based on randomization (A/B testing). The generated knowledge will allow improved model-based impact assessment of energy policies in the EU and globally. In order to achieve such an ambitious goal, the following specific objectives will be addressed:

• Assess the existing knowledge on behavioural factors for energy efficiency.
• Conduct a large sample survey in different countries in collaboration with energy utilities
• Conduct A/B tests to test various interventions in different countries.
• Evaluate the importance of sociological aspects and institutional conditions for energy efficiency.
• Analyse the importance of energy literacy for energy efficiency.
• Evaluate the determinants of investments in energy efficiency for firms in the manufacturing industry.
• Evaluate the broader implications of energy efficiency policies for the EU as well as for major world economies.
• Design IT platform back-end and awareness apps, based on gaming and gamification.
• Develop an interactive mapping tool to synthetize the main output of project’s various work packages.

Work performed

The activities carried out produced a ranking of different policies aimed at improving energy efficiency. The stock-tacking activities also allowed us to develop a conceptual framework, that merges theoretical models incorporating behavioural aspects, a welfare framework and empirical results. Moreover, by analysing the data collected through a large sample survey we were able to compare the consumption of energy services, psychological characteristics and energy-related financial literacy in different European countries.

We applied innovative methodologies based on randomization to better understand the psychological, social, economic and financial factors that influence energy use. Through a conjoint analysis, we tested which characteristics of energy policy influence its acceptability. We have also tested the influence of values, environmental self-identity, personal norms, social norms and corporate environmental responsibility on energy use. Through an A/B test we tested the effect of two messages aiming to promote the investment in shares in wind energy. We started additional analyses through A/B testing to assess the effect on energy use or investment in energy efficient appliances of: i) financial incentives; ii) social comparison; iii) energy savings goals; iv) in-home energy audit. Finally, we are developing consumption gamification and games that aims to influence energy related behavior.

PENNY focuses on the factors that affect the decisions to invest in energy efficient technologies of households and the commercial sector. We explored the determinants and in particular the effect of energy-related financial literacy on energy efficiency. Finally, through tape interview-based case studies, we analysed social dimensions of household energy consumption and energy saving projects.

Final results

The project aims to make substantial contributions in the analysis of energy efficiency in order to support the development of energy efficiency strategies, policies and programmes across Europe. To do so, the project advances the current state of the art on energy efficiency in various ways. PENNY provides an innovation in the assessment of the energy-efficiency policies, by offering a comprehensive assessment of the effectiveness of different types of policies targeting energy efficiency. PENNY compiles a novel dataset at the household level, on consumption of energy services, psychological characteristics and energy-related financial literacy in different European countries. PENNY conducts A/B tests in two domains. The first domain is behaviour related to energy curtailment, which represents routine, repetitive effort to decrease consumption on a day-to-day basis. The second is behaviour related to investments, which are one time actions such as purchasing new energy efficiency technologies and modifying a building or a house. PENNY considers novel determinants of energy efficiency such as energy literacy. PENNY assesses the broader implications of key energy efficiency policies using two different energy-economy models.

PENNY will generate quantitative information on expected impacts of EU policies in selected countries and the EU in its entirety. PENNY will guide the policy process by assessing the existing policies in energy efficiency, identifying their strengths and weaknesses and by providing evidence based suggestions for the design of new policies. PENNY will help businesses in the energy sector to innovate their services. By better understanding individual behaviour in energy efficiency and by designing incentives that strengthen intrinsic motivation to adopt energy efficiency, PENNY will contribute to move efficiency patterns and lifestyles towards more sustainable energy use. The outcomes of PENNY can be beneficial for other contexts and other disciplines. They can be applied to improve not only environmental behaviours, but also moral and healthy behaviour.

Website & more info

More info: http://www.penny-project.eu/.