MECHanisms | Make Energy Change Happen Toolkit

Instruments to promote energy savings

There are many different instruments that you can use to promote energy savings by end-users. All these instruments have different characteristics that determine their effects on the energy behaviour of the target group and the adaptation of the instruments to your context. The success of the different instruments is also influenced by different factors. We focus on instruments that are relevant for intermediairy organisations, therefore we do not elaborate on such policy instruments as regulation and R&D support. See below for more details on the different instruments, the behaviours they target and key points influencing their successful use. For more details, see CHANGING BEHAVIOUR Deliverable 5: Interaction Schemes for Successful Energy Demand Side Management

Financial support and services

Instruments based on financial support and services are temporary measures to mobilise energy end-users or to promote energy efficient technologies by speeding up market expansion and eventually lowering the costs of these technologies. These instruments thus mainly target efficiency (investment) behaviour. They are often part of packages of instruments and for example combined with audit schemes or voluntary agreements with end-users. They include:

Financial instruments and subsidies. These promote energy efficient technologies and measures by reducing the investment costs (for example subsidies for energy audits or investments, soft loans with subsidized interest rates). These instruments are usually profitable for the end-user at the long term.
Fiscal incentives. These aim to reduce the tax on energy efficient measures (for example tax credits, tax deductions or accelerated depreciation rates).

Factors influencing the success of financial instruments are diverse and include:

Contextual factors: availability and quality of technologies, ability to inform end-users about subsidies and fiscal measures, demography, energy prices, integration between energy efficiency policy and other sectoral policies, etc.
Programme characteristics: adequate information for end-users, easy and short application procedures, focus on investments with long payback time and high efficiency gains or innovative technologies, subsidies on energy audits, etc.
Design factors: good combination of financial and informational incentives (if needed in combination with technical and organisational support), fit to decision making process of end-user, etc.
Process factors: simple and easy administration of the programme.

The impact of financial support and services can be evaluated in terms of output (number of loans or guarantees, etc), outcomes and impacts (e.g. energy savings achieved). Some benefits may extend beyond energy use as well (e.g. reduction fuel poverty or improvement living conditions).

Information and education campaigns

Information and education campaigns supply information about energy efficiency and savings via different communication channels. They aim for different effects (raising awareness, education and providing knowledge, influencing and maintaining behaviour, etc). They mostly target curtailment behaviour focussing on motivation and capacity to undertake long lasting behaviour changes in energy consumption. They can also trigger efficiency (investment) behaviour.

Factors influencing the success of information and education campaigns include:

Contextual factors: use of topic that is positively valued in society, connection to other similar projects to increase mutual collaboration and repetition of message via different channels, etc.
Programme characteristics: simple, fun and easy message, a mutually reinforcing programme including attention for messenger, goals, design of message, approach of end-users, choice and use of communication channels, etc.
Design and process factors: design should be based on theories of human behaviour and communication on different levels, the right marketing mix of products, prices, placement and promotion, etc.

The impact of education and information campaigns can be evaluated by detailed monitoring of effect of the message on target group. The impact and effect can be increased by providing positive feedback to the target group during the programme of behavioural changes so far.

Metering and feedback

Metering and feedback (e.g. informative billing) instruments provide end-users with more detailed, comparable and comprehensible information on their energy use. They target routine, habitual and unthinking types of behaviour and are most effective over longer periods of time (or even continuously). Metering and feedback are related to energy audits and energy advice. Many different technical concepts for metering and feedback exist, ranging from automated meter reading to smart meters with bi-directional communication and full in-house communication between meter and appliances and more advanced concepts with two-way communication that allow the supplier to communicate directly with end-users (e.g. via internet or television)

Factors influencing the success of metering and feedback include:

Contextual factors: existing systems of energy metering and billing, innovative utilities, existing payment system, legal requirements, use of smart meters, status of metering markets, cultural differences in preferences for presenting information, etc.
Programme characteristics: informative billing and metering for residential customers and businesses, related to actual consumption, comparative standards, etc.
Design factors: (interactive) media and mode of presenting energy use information, written material, electronic meter or interactive tools via internet, timing and control of information, etc.
Process factors: frequency of feedback, combined feedback with incentives or targets for energy saving, link to individual activities of consumers, etc.

The impact and effects of metering and feedback instruments can be evaluated by the interest in and use of information by the target group and the effects of these on the energy use.

Energy audits

Energy audits consist of on-site inspection of existing infrastructure and the activities of the customer by the auditor (energy rating) followed by an identification of saving potential. These are translated into personalised advice for the customer about most cost-effective saving measures including recommendations for investments written down in an audit report. The advice can differ in scope and thoroughness. Energy audits primarly target investment behaviour (curtailment behaviour is only a secondary target) and are mostly provided by third parties (like ESCOs and energy agencies) and sometimes by NGOs.

Factors influencing the success of energy audits include:

Contextual factors: availability of impartial and qualified auditors, supportive policy framework, subsidies and refunds for investments, etc.
Programme characteristics: most feasible for larger energy users (organisations), including subsidies for audit costs, ‘one-shop-stop’ (auditor providing multiple services), etc.
Design factors: training and certification of auditors, standardised process, etc.
Process factors: communication and involvement end-users, identification of target group and their needs, marketing efforts, evaluation of outcomes, etc.

The impact of energy audits can be evaluated by number of audited facilities and reports, number of clients, effects measured like energy consumption before/after and share of recommended investments made.

Energy advice

Energy advice aims to provide end-users with skills and solutions for energy related problems. It is personalised guidance which can be provided to end-users via different means (telephone, internet, on platforms, in real or virtual groups, visits, workshops, written materials, etc). It always involves some interaction with the customer. Energy advices mostly target curtailment behaviour although raising awarness and increasing motivation to invest in efficiency measures as an element in the behavioural change is often part of the advice as well.

Factors influencing the success of energy advices include:

Contextual factors: availability of local (impartial) institutions for advice, supportive policy framework, etc.
Programme characteristics: impartial expertise, technology independent advisors, grounding in clients needs, integrated and single issue advice, etc.
Design factors: multiple benefits to clients, personalised advice, communicative and technical skills of advisers with social and market knowledge, etc.
Process factors: tailoring advice, reaching customers at right time, develop right partnerships, effective adviser training and continuous updating of knowledge, bridging gap between information and implementation, etc.

The effects of energy advice can be evaluated by the initiated investments of customers or increased knowledge of customers about energy (use).

Voluntary programmes and negotiated agreements

Voluntary programmes and negotiated agreements are systematic instruments that primarily aim to raise awarenss of habitual behaviour and to increase people’s sense of responsibility for changing their behaviour. Voluntary programmes target individuals, households or organizations which voluntary make a commitment to join a programme. Negotiated agreements aim for energy savings through bargaining between public authorities and industry (or sectors). These instruments are often combined with other instruments like energy audits.

Factors influencing the success of voluntary programmes and negotiated agreements include:

Contextual factors: social pressure or systems of social control, etc.
Programme characteristics: including supporting instruments and regulations, positive incentives combining goal-setting with feedback, etc.
Design factors: target setting must be open and transparent, clarity on commitments on both sides, adoption of new roles and responsibility, impartial intermediaries are relevant, good communication, networks among participants, support a long-term change process, etc.

Voluntary programmes and negotiated agreements have a range of ‘soft effects’ like capacity building, increasing awareness, empowerment and transfer of responsibilities from authorities and experts to energy end-users themselves.

Instruments to promote energy savings

Further reading