Modeling energy efficiency investment choices – a case study on Croatia’s residential sector

ABSTRACT

This article presents a methodological approach for incorporating household consumption characteristics and investment choices into energy efficiency policy models. The approach used is based on country-level stated preferences survey for evaluating consumer decisions and attitudes toward energy efficiency. The decision-making process was analyzed and modeled with logistic regression and applied onto the existing single-family housing stock. By applying the described framework, policymakers, or any other subsidy providing authority aiming to reach specific energy savings target, can obtain the distribution of financial incentives among different income classes. The developed model provides a framework for cost minimization and energy saving maximization. The model provides the minimal level of subsidies needed to achieve energy savings goals or maximum level of energy savings possible with a predefined budget for energy subsidies. The model accounts for consumer disaggregation and all results are provided per expenditure groups.

KEYWORDS:

• Energy efficiency
• energy modeling
• energy policy
• household decision making
• investment subsidies