Barriers to energy efficiency – an econometric analysis of determinants

Panel: Panel 5. Market-based instruments

Authors:
Edelgard Gruber, Fraunhofer Institute for Systems and Innovation Research
Joachim Schleich, Fraunhofer Institute for Systems and Innovation Research

Abstract

A vast body of literature suggests that there are various obstacles to energy efficiency in private and public organisations or individual households. Barriers such as market failures, transaction costs, or imperfect information may even prevent cost-effective technologies and practices from being realised. In this paper, we use econometric techniques to assess the determinants of barriers to energy efficiency for the German commerce and services sectors, which predominantly consist of small and some medium sized private and public organisations. The barriers analysed include lack of time, lack of information about energy consumption patterns, lack of information about energy efficient measures, organisational priority setting, uncertainty about energy costs, and the landlord/tenant problem. For each barrier, a separate regression is run on a set of “explanatory” variables, which includes energy consumption, organisation size, whether an energy audit was conducted, and sector-specific dummies. The findings complement case study results, but policy recommendations are based on a much broader statistical basis.