Barriers and Tools for Energy Efficiency: A Socio-economic Approach

1. Barriers and Tools for Energy Efficiency: A Socio-economic Approach By: Katherine Bergen Myriam Broué Vanessa Dziarmaga Suzanne Love Julie Smith

2. The Client Introduction to energy efficiency Research Questions Methodology Results and Analysis Conclusions and Recommendations Acknowledgments Overview

3. The Client - L’Union des Consommateurs • Fédération des Acef du Québec (FACEF) and Action Réseau Consommateur • Non -profit organization • Defends rights and interests of consumers • lower incomes

4. The Client - L’Union des Consommateurs Interested in: • the potential for energy efficiency in Québec • barriers to energy efficiency by socio-economic classes • tools for overcoming barriers to energy efficiency

5. Low-Income Definition • Number of people per household • 1 person: 21,213 • 4 people: 42,084 • 7 people: 53,677

6. What is Energy Efficiency?Defined by the World Energy Council • ‘ all changes that result in decreasing the amount of energy used to produce one unit of economic activity… or to meet the energy requirements for a given level of comfort. ’ • ‘ associated to economic efficiency and includes technological, behavioral and economic changes. ’

7. Why is energy efficiency important? • 6th largest consumer of energy • Environmental, economic and social concerns • Desirable to reduce energy consumption • How? INCREASE ENERGY EFFICIENCY

8. How can energy efficiency be increased? • 20 % of energy is used in the residential sector • Benefits of improving residential energy efficiency: • Environmental benefits • Economic benefits • Social benefits

9. The Research Questions (1) How big is the potential for energy efficiency in the Québec residential sector? (2) What are the barriers within various socio- economic classes that inhibit consumers from being more energy efficient at home? (3) What are the appropriate “tools” that are needed to help each socio-economic class of residential consumers overcome the identified barriers to energy efficiency?

10. The Research Questions (1) How big is the potential for energy efficiency in the Québec residential sector?

11. Methodology: Question 1 • evaluate three different calculations of potential • reports by various organizations • potentials were evaluated and compared • analysis of calculated potentials

12. Results: Question 1 Hydro-Québec Development Plan, 1990 • 2 goals • energy savings • consumption management • technical potential: 45 TWh • economic potential: 27.6 TWh • overall objective 9.3 TWh revised to 6.2 TWh

13. Results: Question 1

14. Results: Question 1

15. Results: Question 1 Hydro-Québec Development Plan, 1990 • potential for all of Québec • hard to determine accurately

16. Results: Question 1 1992 vs. 2001 Factors : • calculated 9 years apart • improved technologies • increased available programs • increased regulations • better understanding of parameters • reduction in avoided cost

17. The Research Questions (2) What are the barriers within various socio- economic classes that inhibit consumers from being more energy efficient at home?

18. Methodology: Question 2 • Examination of literature • Barriers categorized by socioeconomic class • All socioeconomic class • Universal barriers, which are amplified in low socioeconomic class • Low socioeconomic class • Average income

19. Results: Question 2 All socioeconomic classes: • Pricing of energy below its true cost • Attitudes towards energy efficiency • Construction of new homes and buildings- separation of expenditure and benefit

20. Results: Question 2 Universal barriers, which are amplified in low socioeconomic class • Information access • Uncertain technologies • Consumer credit • Lack of knowledge • Unfavourable payback periods • High initial capital costs • Difficult installation

21. Results: Question 2 Low socioeconomic class • Tenancy • Low Liquidity • High perceived discount rates

22. Results: Question 2 Low socioeconomic class • Tenancy: separation of expenditure and benefit • Tenant-landlord interaction • Tenancy rates

23. Results: Question 2 Low socioeconomic class • Low liquidity • little cash • low ability to raise cash

24. Results: Question 2 Low socioeconomic class • High Perceived discount rates • The undervaluation of future energy savings

25. Results: Question 2 Average Income • Energy costs are a small part of household expenditures • Low income: 14% • Average income: 3%

26. The Research Questions (3) What are the appropriate “tools” that are needed to help each socio-economic class of residential consumers overcome the identified barriers to energy efficiency?

27. Methodology: Question 3 • Tools used in programs • Programs from Federal and Provincial governments • NGOs • Energy supplying companies

28. Tools Leadership Information and education Volunteering initiatives Financial incentives Regulation Research and development Results: Question 3

29. Results: Question 3 Federal Programs • Natural Resource Canada and Office of Energy Efficiency • EnerGuide • Energy Star • R- 2000

30. Results: Question 3 Non-governmental Organizations • Canadian Low-Income Energy Efficiency Program

31. Results: Question 3 Provincial programs • Hydro-Québec • Gaz Métopolitain

32. Results: Question 3 Non-governmental Organizations • Energy-Cost Saving Program for Low-Income Households

33. General Recommendations • educational programs • subsidize energy efficiency programs • government regulations • NGO’s • information access

34. Recommendations to the client • Continue research • Collect raw data for Montreal

35. Acknowledgements The group would like to thank Prof. George McCourt and Mounir Gouja for their patience and assistance.