Energising households: a financial analysis of incentivised energy efficiency measures in remote Australia

Abstract

Governments in developed economies are making considerable investments in energy efficiency technologies and encouraging residential households to conserve energy. A major programme in Australia has invested A$280 million to encourage residential households to become more energy aware and make additional investment in energy efficiency measures. This paper examines the adoption of energy efficiency measures by residential households participating in this programme in a geographically remote Australian town. It uses data collected by the programme developers. It examines the financial return of the investment in terms of payback period and internal rate of return. It then discusses the financial return with respect to adoption of a range of products offered by the programme. Results show that adoption of energy efficiency measures by households was not solely guided by rational economic-maximising principles. For example, some frequently adopted measures had negative financial effectiveness. A range of important determining factors are discussed, and the consequent impact this has for analysis of the effectiveness of incentive programmes. Finally, this paper proposes considerations for future programmes to more effectively measure and target efficient adoption of energy efficient measures, both in remote and non-remote residential settings.