Abstract
Buildings consume around 40% of energy and emit 36% of CO2 emissions and, as the largest single energy consumer in Europe, offer the opportunity for significant savings. Building energy labels, also known as Energy Performance Certificates, are a method of providing home buyers with information about the estimated energy consumption of a particular home, enabling them to make more informed decisions in the property market and hopefully encouraging the construction of more energy-efficient homes because of the extra premiums they should charge. There is imperfect information available on the cost-saving effects of efficiency improvements, and the aim of this paper is to examine the role of current building energy labels and the effects of framing this information in terms of its monetary impact on energy bills by conducting a discrete choice experiment. The modelling results show that when monetary estimates are included as part of Energy Performance Certificates, the willingness to pay for higher levels of building energy performance increases by 47%. These results suggest that the inclusion of such monetary information has the potential to increase the value that consumers attach to more energy-efficient homes, thereby creating an incentive to either build better energy-efficient homes or retrofit current housing stock to increase its value.
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Notes
The whole questionnaire used in the property DCE is available in the Appendix.
This section relays heavily on the CONSEED deliverable Report on Choice Experiments on the Effectiveness of providing Information on Energy Costs on Energy-Related Decisions in Households.
As the price coefficient reflects the change in utility for a unit (€1) change in price, magnitudes are extremely small. The coefficient value is 0.00002, while the standard error value is 0.000001.
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Acknowledgements
This paper was supported by the European Union’s Framework Programme for research and innovation Horizon 2020 under grant agreement number 723741, project CONSEED. The authors also acknowledge the financial support from the Slovenian Research Agency (research core funding No. P2-0356).
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Appendix
Appendix
Questionnaire 1 Questionnaire used in the property DCE in Slovenia.
Introductory text
The study is part of a research project funded by the EU and will provide insights into your views on important questions. It will require 8–10 minutes to complete the study.
Screening questions
Do you currently own property in Slovenia? [Yes; No].
Will you purchase a house or an apartment in the next three years? [Yes; No].
What type of property will you purchase? [House; Apartment; Do not now].
How involved are you in decisions relating to your past or future property decisions? [Very; slightly; Not at all].
Background questions
Imagine buying a property (an apartment or a house).
How important is each of these characteristics for you? [not at all important; not very important; fairly important; very important; don’t know]
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state of the property (when the property was last renewed)
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distance from your service or faculty
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distance of important infrastructure (kindergarten, school, post office, bus)
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energy efficiency (e.g. quality of insulation, windows, mode of heating)
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size
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price
The introductory text to DCE part of a survey
*Note: The choice experiment was shown only to the respondents who indicate that intend to buy house/apartment in or near one of the preselected cities.
We want to explore how much weight you place on different factors when you are buying a property.
Imagine that you are buying a two-bedroom apartment in the ‘Name of the city’ or the surrounding area.
We will show you several offers of apartments, three at a time. All apartments are two-bedroom, have the same square footage (55 m2) and the same arrangement. Take a look at each offer, think about which apartment meets your criteria and capabilities and choose the one that suits you best.
Dwellings will differ only in the following qualities:
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1)
Condition (last adaptation of the property – installations, windows, parquet):
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Brand new
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5 years ago
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10 years ago
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20 years ago
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2)
Location.
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City centre
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Suburbs (the outskirts of the city)
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Outside the city
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3)
Distance from important infrastructure (bus, post office, kindergarten, school …).
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1 km
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2 km
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3 km
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4)
Energy certificate.
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Show all cards [(kWh/m2)/per year or €/per year]
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5)
Price (view is related to the desired place of purchase).
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80% (e.g. € 128,000 for Ljubljana)
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90% (e.g. € 144,000 for Ljubljana)
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100% (e.g. € 160,000 for Ljubljana)
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110% (e.g. € 176,000 for Ljubljana)
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120% (e.g. € 192,000 for Ljubljana)
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Lakić, E., Carroll, J. & Gubina, A.F. The role of monetary information in energy performance certificates: a Slovenian experiment. Energy Efficiency 14, 79 (2021). https://doi.org/10.1007/s12053-021-09995-4
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DOI: https://doi.org/10.1007/s12053-021-09995-4