Using narratives to infer preferences in understanding the energy efficiency gap

Investing in energy efficiency is crucial for a low-carbon economy, particularly in the building sector. Despite various subsidy programmes, meeting energy targets is challenging because households do not invest sufficiently. Here we study the low numbers of energy efficiency retrofits carried out by homeowners. We use narratives, an emerging method based on open-ended survey responses, to identify the barriers and determinants behind renovation decisions. Using natural language processing, we transform narratives into quantifiable metrics. Whereas financial considerations are a major barrier for homeowners, their main reasons for renovating are not related to energy savings. Most homeowners delay energy-saving investments until their buildings require renovations. Co-benefits such as environmental concerns and comfort gains are equally or more important than financial motivations. Many homeowners are unaware of existing policies and would favour reducing the bureaucracy of retrofits. Subsidies, although popular, are likely to be mistargeted. Effective policies should also consider institutional factors such as the bureaucratic burden and the accessibility of information.

Tobias Wekhof, Sébastien Houde