Luis Mundaca
Professor
On-Bill Financing Programs to Support Low-Carbon Energy Technologies : An Agent-Oriented Assessment
Author
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
Full text
- Available as PDF - 578 kB
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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