Energy efficiency: exploring the dynamics of the retrofit market and the impact of green mortgages in the UK using system dynamics
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2017-08-30
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en
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Abstract
Housing is responsible of around one third of emissions in the UK and is a primary target to
alleviate Climate Change. Strict regulations on new buildings are not sufficient to meet the
national pledges for emission cuts and it is crucial to intervene on the existing stock, one of
the oldest in Europe. Past policies often failed because lacked integration and system
understanding. This research investigated the dynamics involved in the retrofit market for
energy efficiency in the UK’s owner-occupied sector, with particular regard to the potential
effects, leverages and resistances of policies related with mortgages and tax rebates.
Participatory system dynamics was applied involving members of the government department
devoted to energy efficiency policies through a series of workshops and interviews. This, with
the support of literature review, lead to the development of a qualitative map and a system
dynamic model to test scenarios for the diffusion of retrofit measures up to 2050. The research
highlighted the relevance of the demand for retrofit for amenity reasons and compulsory
regulations on replacements, as well as the prominence of single measure interventions and
market fragmentation. Policies are estimated to deliver up to 10-20% improvement on the
baseline scenario for solid wall insulation uptake. Nevertheless, feedback analyses pointed out
that the green mortgage policy faces potential challenges due to the fragmented state of
supply and the lack of trust and engagement by both lenders and borrowers. Final
recommendations are made up of two non-exclusive options: one is to invest in a retrofit-overtime
single-measure strategy, making measures compulsory or very popular and attractive,
possibly flanked by awareness campaigns and open-source digital advice; the other is to create wider scope for retrofit projects through an urban or community-based delivery mode, concurrently facilitating collaboration between lending institutions and retrofit supply, like supporting moneyback guarantees and standard procedures for green loans underwriting.
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Faculteit der Managementwetenschappen