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Luis Mundaca

Luis Mundaca

Professor

Luis Mundaca

On-Bill Financing Programs to Support Low-Carbon Energy Technologies : An Agent-Oriented Assessment

Author

  • Luis Mundaca
  • Sarah Kloke

Summary, in English

On‐bill financing (OBF) schemes have been welcomed as innovative mechanisms for encouraging the adoption of low‐carbon energy technologies. Yet while the potential effects of these schemes have received growing attention, less is known about their actual performance. Departing from New Institutional Economics and insights from Behavioral Economics, this theory‐driven assessment examines the How$mart® program in Kansas (United States) and the Green Deal in the United Kingdom. The study identifies the mechanisms designed to trigger behavioral change and technology adoption. We focus on market agents, and related market failures and behavioral anomalies that often prevent energy efficiency improvements. The paper adds to our theoretical and empirical understanding of public and utility‐driven OBF programs applied to the residential sector. Our findings suggest that simple, carefully designed on‐bill programs, where the financing of efficient technologies takes the form of a service rather than a loan, are more effective for the diffusion of low‐carbon energy technology and the reduction of transaction costs. At the same time, on bill‐financing schemes challenge the core business of utilities, and given the complexities and dynamics of energy efficiency markets and energy use, other policy interventions are needed.

Department/s

  • The International Institute for Industrial Environmental Economics

Publishing year

2018-08-03

Language

English

Pages

502-534

Publication/Series

Review of Policy Research

Volume

35

Issue

4

Document type

Journal article

Publisher

Wiley-Blackwell

Topic

  • Social Sciences

Keywords

  • Behavioral change
  • Climate mitigation
  • Comparative governance
  • Energy use
  • On-bill financing schemes
  • Policy innovation

Status

Published

Project

  • Behavioural economics for energy and climate change policies and the transition to a sustainable energy system.

ISBN/ISSN/Other

  • ISSN: 1541-132X