Householder preferences for the design of an energy efficiency retrofit subsidy in Ireland

Improving the energy efficiency of residential dwellings generates private benefits to homeowners, including lower energy costs, health benefits, and improved property values, as well as positive externalities associated with reductions in greenhouse gas emissions. Underinvestment in residential energy efficiency has been attributed to market failures and behavioural issues, which provides a basis for public policy intervention in provision of energy efficiency. This paper examines households’ preferences for design features of energy efficiency retrofit subsidies and how these preferences vary across the usual respondent attributes. Based on a survey of Irish homeowners we find that cash payment subsidies are strongly preferred compared to other indirect methods of financial support such as tax credits, roughly by a 70:30 ratio. There are two notable areas where preferences differ by respondent attributes; age and whether respondents have previously availed of an energy efficiency retrofit grant. The preferences of older age cohorts differ compared to younger respondents across all the subsidy schemes examined, whereas people who have previously availed of retrofit grants are more likely to favour ex-post cash payments compared to upfront discounts.