Policy Instruments to Improve Energy Performance of Existing Owner Occupied Dwellings
Authors: Murphy Lorraine Colette 
Published: November 2023

The aim of this thesis is to add knowledge to the role and impact of policy instrumentsin meeting energy performance ambition in the existing owner occupied housing stock.The focus was instruments available in the Netherlands in 2011 and 2012. Theseinstruments represented the ‘on the ground’ efforts to meet climate change targetsand many continue to do so today in the same or slightly altered forms. At international level there is a recognized need to keep global temperatures withinthe range of 1.5 - 2°C above pre-industrial levels (Carrington, 2016). At Europeanlevel, the 2020 package contains a series of binding legislation to help the EU meetits more immediate climate and energy targets. 2020 targets include 20% reductionin greenhouse gas emission, 20% of EU energy obtained from renewable sources and20% improvement in energy efficiency. 2020 targets for the Netherlands are a 20%reduction in greenhouse gas emissions and a 14% increase in energy generation fromrenewable sources (Vringer et al., 2014). A raft of policies has been produced over the last number of decades from internationalto local level to orientate action towards targets. At European level the EnergyPerformance of Buildings Directive (EPBD) drives efforts at reducing energy amongone of the biggest players, the building sector. By requiring a mandatory certificateat the point of sale and rent of buildings and making regulatory demands on existingbuildings the EPBD upped the ante of what could be expected from the building sector,but especially the existing dwelling stock. National governments have already been tackling existing dwellings for decadespropelled by the energy crisis and later by climate change policy. Informationcampaigns, subsidies, energy taxes, energy loans and tailored advice are among theinstruments that have been available to homeowners to carry out works on theirdwellings to reduce energy consumption. In recent years, the pace of efforts hasincreased due to, inter alia, the realization that the revolution in energy use that mustoccur for climate change targets to be met means major changes in the fabric of theexisting dwelling stock, dwellings constructed before building regulations demandedhigh energy performance standards. It is argued that the building sector, in general,and the existing dwelling stock, in particular, can contribute more cost effectively and more significantly in quality and quantity terms than any other sector (Amstalden et al.,2007; Lomas, 2010; Ürge-Vorsatz, et al., 2007). This has provoked calls for new andimproved instruments to meet the energy saving potential of existing dwellings. Despite many of the same instruments being used for decades there is little solidinformation on many crucial dimensions of how instruments operate and on whatimpact they have. The few evaluations and reviews that do take place are commonlyfocused on theoretical energy savings and costs and instrument strengths andweaknesses. Instruments commonly appear and disappear without undergoingimprovement or change or contributing to policy learning. Many instruments are ladenwith assumptions about the target group that are never formally or comprehensivelyproved or debunked. Little theorizing takes place on the type of instruments mostsuited to the target group. Fundamentally, there is a serious lack of informationsurrounding the effectiveness of instruments assumed to be making climate changetargets a reality. It is the above mentioned information deficits that influenced the objectivesand structure of this thesis. Instruments are examined from different angles andviewpoints, from experts, owner occupiers, official evaluations and front-runnercountries. Assessment frameworks were developed to tease out how well instrumentstruly function. Households in receipt of instruments such as the EPC and energy auditwere compared to households not in receipt of instruments. Moreover, the completerange of national instruments available at the time of the survey were studied topresent a complete picture. A more detailed description of the methodologies adoptedis presented below. Methodology An aim of research was to offer qualified accounts and a deeper analysis of howinstruments for energy performance improvement in existing dwellings function.Research components focused on both individual instruments and combinationsusing a triangulation of methods and sources: expert interviews, a survey and literaturereview. The first step towards meeting the aim of research was to characterise andassess national instruments in the Netherlands. In the absence of an assessmentframework for policy instruments in this domain one was created using elementsof the theory based evaluation method and concepts from literature. All nationalenergy performance instruments operating at the time that could influence energy performance improvement for space and water heating in existing dwellings wereincluded in the evaluation. Data was obtained from face to face semi-structuredinterviews with 19 stakeholders involved in lobbying, designing, implementing andevaluating instruments. Interviewee data was complemented with secondary sources,including; evaluations of the national climate change programme, evaluations ofindividual instruments, cross country evaluations and European projects in which theNetherlands participated. An online survey of owner-occupiers covering the same instruments as thecharacterization and assessment of instruments described above was conducted toexpand the investigation into instruments. More than 5,000 Dutch owner-occupiersparticipated in the survey. The survey consisted of 96 questions about energy savingmeasures adopted within the years preceding the survey. The focus lay on measuresthat involved significant investment to reduce energy consumed for space and waterheating. The questionnaire consisted of multiple choice and open ended questionsdivided into several categories; the adoption and planned adoption of energy savingmeasures, energy audits, the EPC, building regulations, the energy tax, financialincentives, information tools and socio-economic and dwelling characteristics. Data onmotivations for energy use and perceived influences of instruments was also gathered. The questionnaire was used to meet several objectives. To survey the overalleffectiveness of the national instruments available to owner occupiers at that time,to compare owner-occupiers who received an EPC to those who did not along severalparameters and to compare owner-occupiers who received an energy audit to thosewho did not along several parameters. Required sample sizes were calculated onthe basis of assumptions and several critical components of the questionnairethat required a set response rate to allow statistical comparison (See Appendix 2).Approximately, 30,000 households from the national EPC/energy audit databasewere sent a link to the questionnaire. The comparison group was created by sendingapproximately 16,000 members of the Home Owners Association a link to thequestionnaire. Following a reminder, a response rate of 17% was received for theEPC/energy audit database and 10% for the Association of Home Owners database.Both descriptive and statistical analysis was conducted on response data. Descriptiveanalysis focused on whether householders reported an association between theadoption of energy saving measures and instrument use. Pearson’s chi squaretests were used to identify whether an association between adopting measures andinstruments could be statistically proven. The final research component consisted of a comparative study of several front-runnercountries to gather knowledge and examine the instruments associated with successin meeting climate change targets for existing dwellings. Literature from comparativepublic policy was used to structure this research component. Denmark, Germany,Sweden and the UK were chosen as front-runner cases. Based on document analysis the instruments considered to dominate action in these front-runner countrieswere characterised. As with the first research component an evaluation frameworkwas developed and the main instruments were assessed against concepts drawnfrom literature. Using concepts from literature was an effort to go beyond traditional‘strength and weakness’ based evaluations by searching for how instruments tackle,or fail to tackle, salient issues in this policy domain. Therefore, ‘effectiveness’ ofinstruments was interpreted as both the documented results of goal achievementand the extent to which instruments deal with aspects unique to this policy domain.Results from document analysis and instrument assessments based on concepts wereverified in phone interviews with national experts. Findings A qualitative evaluation of national instruments Instruments were evaluated using 1) elements from the theory based evaluationmethod and 2) a set of ‘ideal’ concepts. An overview of the first phase of the evaluationis presented in the table below. Fundamental problems with how instruments wereimplemented were identified in this phase of the evaluation. Most notable was howthe EPC was implemented without an enforcement regime resulting in poor visibility,confusion and lack of confidence in the market distancing the EPC from its originalambitious theory and objectives. Similarly, the Meer met Minder sectoral agreementwas associated with financial issues and lack of clarity on responsibilities. Economicincentives were heavily criticised by interviewees and found wanting from evaluationsbeing described as ‘modest’ and ‘highly fragmented’. Meanwhile, the energy tax wasunanimously described as revenue raising. Little could be obtained from publishedsources or expert interviewees on the impact of information tools although someinterviewees believed that tools are designed for the already informed. Buildingregulations were found to lack the innovative dimensions visible within other countries,such as consequential works, though few interviewees saw potential to strengthen thisinstrument. The second phase of the evaluation examined how instruments functioned compared to normative concepts. Concepts chosen were: – Policy instrument combinations – Obligating/incentivising balance – Long term programme –Non-generic –Primacy to energy efficiency –Whole house/deep retrofit –Energy sufficiency (the notion that instruments actually lead to energy use reduction) Elements of some concepts were present but far from pervasive. Instruments were: – Typically stand alone instead of operating in combinations – Largely short term instead of being embedded in a long term framework – Almost entirely incentivising thus lacking the obligating balance suggested from theory – Generic thus ignoring the great diversity associated with households –Largely bypassing the important role of first securing energy efficiency beforeimplementing other measures (i.e. renewable technologies) – Piecemeal in place of whole house – Disassociated from an end point of energy use reduction. Some ingredients for a successful strategy for existing dwellings were however present.The Meer met Minder subsidy was the only performance based subsidy in place at thetime of research and was associated with positive results. With subsidy amounts linkedto rating changes in the EPC/energy audit it also demonstrates a successful couplingof instruments. Furthermore, interviewees, though regretful of how the EPC had beenprogressing, remained hopeful for a better future for this instrument with scope fordifferent manipulations for example, with links to property taxes.