Energy Efficiency Investment Beyond Economics

The German government aims to achieve virtually climate-neutral building stock by 2050 to tackle climate change. To realise this goal, comprehensive policy packages based in neoclassical economic theory are in place to foster energy efficiency investment. However, in the building sector, there is increasingly a gap between the aspiration and the reality. It is claimed that one of the main reasons for this is that the existing policy framework fails to address the specific characteristics and needs of different groups of building owners. This is a particular challenge in Germany, where 80 per cent of all dwellings are owned privately and 37 per cent are rented out by small private landlords (SPL). Despite the significant number of SPL, they often follow black box decision-making processes when considering energy renovations.

In the study "Beyond economics – understanding the decision-making of German small private landlords in terms of energy efficiency investment", Steven März (Research Group Energy, Transport and Climate Policy at the Wuppertal Institute) uses an explanatory model to understand the decision-making processes of SPL, combining theoretical aspects from different research disciplines. The results show that in addition to economic factors, the values, beliefs, norms and routines of SPL as well as their personal capabilities and contextual factors play an important role in their decision-making. Based on the findings, recommendations are made for enhancing the effectiveness of existing energy efficiency policies and other supporting instruments, tailored to the specific needs of SPL.

The study "Beyond economics – understanding the decision-making of German small private landlords in terms of energy efficiency investment" by Steven März was published in Energy Efficiency and is available for download.