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Promoting energy efficiency at household level: a literature review

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The household sector is one of the most energy-intensive sectors in Europe, and thus a focal point for reducing greenhouse gas emissions associated with energy consumption. Energy efficiency is considered a key measure to reduce household energy consumption, but several factors could lead to an underinvestment in energy efficiency. This is the so-called energy efficiency gap or paradox. The factors in question are grouped under market failures (including informational failures), behavioural failures and other factors. Various policies can be used to address these failures and promote the adoption of energy-efficient technologies, including energy standards and codes, economic incentives and information instruments. This paper reviews the empirical evidence to date on energy efficiency policies and discusses their effectiveness. On the one hand, command and control instruments seem to be effective policies, but they have to overcome several barriers. In the case of price instruments, subsidies and taxes do not seem to be effective while rebates present mixed results as they sometimes are effective and in other cases, they could present significant shortcomings. Finally, the effectiveness of informational policies is not always ensured as they depend on the country, sector and product category. Information feedback tools also seem to be effective as they work as a constant reminder of energy-efficient behaviour. Some limitations of energy efficiency policies are also identified, such as the difficulties of implementing codes and standards given that a minimum level need to be achieved, differences in the effectiveness of rebate programmes and non-conclusive results in regard to the effectiveness of monetary energy efficiency labels.

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  1. More details about the report:

  2. For more details, see the results of the CONSEED project:

  3. Including some relevant and theoretical papers from the 1980s and 1990s (Kahneman 1994; Kahneman and Tversky 1984, 1979; Tversky and Kahneman 1981).

  4. An Excel spreadsheet with the different stduies reviwed ha been built and is available on request

  5. An in-depth review of the literature has been undertaken by the authors in the framework of H2020 CONSEED project. For more information, see

  6. Giraudet (2020) explains the difference between symmetric information problems and information asymmetries.

  7. Price elasticity of demand is an economic measure of the change in the quantity demanded of a good in relation to changes in its price.

  8. There are several potential explanations: lack of awareness by consumers of the technology (information problems), the principal agent problem or unobserved costs and other explanations that do not represent market failures (private information costs, high discount rates etc.).

  9. The Excel spreadsheet used for this study is available on request

  10. The vast size of the country, the temperature differences between north and south and the large number of buildings that do not comply with EE standards are just a few examples of these barriers and challenges.

  11. Relative labels establish EE level and fuel consumption compared with the relevant market segment, while absolute labels establish that A-labelled cars consume least (these are usually small cars) and higher vehicles are rated as B or higher.

  12. Compared to receiving the same information via e-mail, apps, SMS or websites.


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This study was conducted as part of the CONSumer Energy Efficiency Decision making (CONSEED) project, an EU-funded H2020 research project under grant agreement number 723741. This research is also supported by the Spanish State Research Agency through María de Maeztu Excellence Unit accreditation 2018-2022 (Ref. MDM-2017-0714). The project leading to these results has received funding from ‘la Caixa’ Foundation under the project SR0435 led by Ibon Galarraga. Amaya de Ayala also acknowledges the support of Fundación Ramon Areces under XVIII Concurso Nacional para la Adjudicación de Ayudas a la Investigación en Ciencias Sociales. Marta Escapa is grateful for financial support from the University of the Basque Country (Grant GIU18/136) and from the Spanish Ministry of Science, Innovation and Universities (Grant RTI2018-093352-B-I00).

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Correspondence to María del Mar Solà.

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This article is part of the Topical Collection on Consumer energy efficiency decision making across sectors

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Solà, M.d.M., de Ayala, A., Galarraga, I. et al. Promoting energy efficiency at household level: a literature review. Energy Efficiency 14, 6 (2021).

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