A new journal article, co-authored by Andrew Leicester of Frontier, finds that the private rented sector should be the key focus of policies designed to improve the uptake of energy efficiency measures in residential housing. Continued improvements in the efficiency of housing will be needed to support government targets to reduce greenhouse gas emissions.
The paper, published in the June 2017 edition of Fiscal Studies, was written with George Stoye of the Institute for Fiscal Studies (IFS), and was completed while Andrew was at IFS. The study draws on data from the English Housing Survey, a large-scale annual survey in which around 8,000 dwellings undergo a physical survey to collect information on energy efficiency and property characteristics. Data on the income and other characteristics of the householders are also collected. A detailed econometric analysis untangles the role that different factors play in whether or not energy efficiency measures (cavity wall insulation, thick loft insulation and full double glazing) are present in different properties.
Key conclusions of the analysis are that:
- Market failures caused by different incentives between landlords and tenants in the private rental sector appear to be a key problem in increasing uptake of energy efficiency measures. The private rental sector lags behind other tenure types, and these differences are not fully explained by the characteristics of the properties or residents.
- Other factors that appear to influence low take-up of efficiency measures include living in older properties, and using solid or communal fuels for heating. As far as feasible, policymakers should use property characteristics to target support for energy efficiency.
- Research into energy efficiency in the UK is hampered by a lack of household-level data that record dwelling and resident characteristics alongside detailed information on energy use. Given the importance of environmental policy and the contribution of the domestic sector to emissions, this problem needs to be addressed.
Frontier regularly advises clients in the public and private sectors on issues relating to energy use and energy efficiency.
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