4 Energy Efficiency Social Drivers
4.1 Introduction
Just as section 3 presented our preliminary findings on the social drivers behind householders' choice of home heating, this section presents our preliminary findings on the social drivers behind the uptake of energy efficiency improvements. The layout - summary table followed by explanatory notes - is identical to that used in section 3. Where the social drivers are the same as for the choice of home heating, the reader is simply referred to the corresponding note in section 3 rather than repeating the text here.
Table 4.1: Drivers behind the uptake of energy efficiency
View drivers behind the uptake of energy efficiency (large table).
4.2 Influences within the individual's immediate, day-to-day circumstances
Encouraging drivers
(1) The severity of local winter conditions
Severe winters may drive households to install energy efficiency measures to increase the warmth of their homes.
(2) Recent increases in residential electricity tariffs
Increasing electricity prices encourage people who can afford it to improve their home insulation. For some people the driver is long term energy savings, but more often the benefits of insulation are felt in increased comfort/better health rather than reduced power bills. For some insulation/energy efficiency improvements, the energy savings driver might be minimal (eg, for double glazing the motivations are more to do with comfort, reducing condensation and improving the home's value) (McChesney and Smith, 2003).
(3) Demographic transition
See section 3.2(4).
Inhibiting drivers
(4) Household tenure - rental accommodation
See section 3.2(7).
(5) Relatively low residential electricity tariffs
For higher-income segments of the market, electricity tariffs are often perceived to be relatively low, especially if using off-peak rates. The perception of low prices reduces the propensity to invest in improved insulation.
(6) Residential electricity tariff structures
Electricity tariffs do not necessarily signal true costs. For example, apart from controlled rate tariffs, consumers generally pay a standard rate tariff throughout the year with no distinction between time of day or season. See also section 3.2(9).
(7) Entrenched attitudes
See section 3.2(11).
(8) Change is invisible
It is difficult to promote energy efficiency because 'you can't see insulation', [KI Interview: Ken Lawn, ECan.] and the outcomes are difficult to measure.
(9) Rising house prices
Rising house prices may have several flow-on effects which inhibit investment in alternative energy efficiency: (1) prices appear to be leading to declining rates of home ownership and more people living in rental accommodation, for longer; this is especially evident among Maori; (2) this leads to households having more capital tied up in the initial purchase of their house and less capital available to spend on upgrades; (3) and investors may be negatively geared (ie, the rent does not cover the loan repayments). [KI Interview: Martin Evans, Christchurch PIA.]
(10) Cost and affordability of change
See section 3.2(13).
4.3 Knowledge, understanding and skills to make decisions to change
Encouraging drivers
(1) The increasing range of information sources available on energy efficiency options
See section 3.3(1).
(2) Increasing exposure of New Zealanders to international experience of well-heated homes
See section 3.3(2).
Inhibiting drivers
(3) A lack of information and 'understanding'
See section 3.3(3).
(4) The absence of a practical, assessable minimum standard for warm homes that is easily understood
See section 3.3(4).
(5) No independent, credible and widely available information resources
While this appears to contradict 4.3(1) above, it relates to issues around hard technical information on product type, quality etc, and long term studies that support the case for energy efficiency improvements.
4.4 Influences from the public policy environment
Encouraging drivers
(1) The publicity and focus of research around health and housing
See section 3.4(1).
(2) Publicly funded programmes
See section 3.4(2).
Inhibiting drivers
(3) No public/public sector strategic partnership to transform the market
While the Energy Efficiency and Conservation Authority has a set of energy efficiency targets set by the National Energy Efficiency and Conservation Strategy (NEECS), there is no strategic delivery plan (that involves Government, the private sector and community sector) to transform the market and meet those targets.
(4) Government focus restricted to low-income households
Energy Efficiency and Conservation Authority's EnergyWise Home Grants programme is restricted to low-income households (or those with health issues), which limits the ability to incentivise across a wider range of lower–middle/upper income households.
(5) Lack of a Home Energy Ratings Scheme
Unlike a number of other countries, there is no Home Energy Ratings Scheme (HERS) operating in New Zealand. A HERS would provide a tangible measure of the energy performance of the house - information that could inform potential homebuyers or renters. The lack of such a rating scheme acts as a disincentive for home owners to invest in energy efficiency improvements, especially if the owner intends to sell the house in forthcoming years, because the investment often remains invisible and unable to be recouped through a higher value on the house.
4.5 Influences from the community and the immediate social environment
Encouraging drivers
(1) Social agencies and NGOs putting pressure on government to address the energy poverty gap
There is now a considerable network of agencies with knowledge and concern about cold housing seeking to initiate actions to address these issues in their communities. See also 3.5(1).
Inhibiting drivers
(2) Insecure funding regime for many NGOs
With central government funding being tied to a local share, many energy-related NGOs struggle to survive, and cannot invest in other activities such as information provision and education.
4.6 The orientation of home heating and related commercial services
Encouraging drivers
(1) Improved range of technology options available
See section 3.6(1).
(2) Capability of firms providing commercial services
See section 3.6(2).
(3) Innovative practices to develop the market
An example is energy efficiency firms promoting their services through third parties such as property managers.
(4) Leadership in social responsibility
An example is energy companies involved in promoting energy efficiency improvements to households with asthma sufferers.
Inhibiting drivers
(5) Firms touting particular products
See section 3.6(5).
(6) 'Cowboy' operators
See section 3.6(6).
(7) The lack of financial products designed to facilitate the market for clean heating options
See section 3.6(8).
(8) No provider of residential energy services providing the complete package
See section 3.6(5).
4.7 Key points
Here are the key points from the analysis of energy efficiency social drivers.
- Many of the drivers of energy efficiency are the same as those for home heating choices.
- Some drivers can be both positive and negative because they affect different segments of the market in different ways. For example, electricity prices can be an incentive for energy efficiency for those with the capital to invest, but electricity prices may also be perceived as relatively cheap and cost-effective in some market segments and therefore do not encourage change.
- Occasionally a driver encourages clean heat but discourages investment in insulation (eg, low electricity prices), which means there can be confusion in promoting both at the same time.
