Willingness to Pay for Renovation of Multi-Flat Buildings and to Share the Costs of Renovation

Dalia Streimikiene,Tomas Balezentis

doi:10.3390/en13112721

Dalia Streimikiene, Tomas Balezentis

Open Access

https://doi.org/10.3390/en13112721

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Abstract

The paper deals with the problems linked to the energy renovation of multi-apartment buildings and developed a case study in Lithuania with the aim to assess the household’s willingness to pay for energy renovation and to define the main barriers preventing the households from making decisions to renovate their apartments in residential buildings. Energy renovation provides huge energy savings and greenhouse gas emissions reduction potential and though policies and measures exist to promote large scale energy renovation, there are still many barriers and the pace of energy renovation is still very slow, especially in new EU member states and former Soviet Union members. These countries have inherited old, energy inefficient residential buildings from their Soviet past, and their inhabitants are locked in energy poverty because of their inability to renovate their apartments. This paper analyzed the current situation in the selected country and presents the results of a case study on willingness to pay (WTP) for energy renovation in Lithuanian residential buildings. The survey of 104 Lithuanian households living in unrenovated multi-flat buildings was conducted. The 39 multiple choice questions were asked in order to define the main barriers and drivers of energy renovation. The main results of this pilot study indicated that there are several important organizational and economic barriers for energy renovation in multi-flat buildings and current policies and support schemes have not addressed them in a proper way. The high heating bills and low heat comfort in apartments were the main drivers of energy renovation decision-making for households, however, inadequate state support, reluctance to take a loan due to low income, and inability to make collective decisions on renovation due to the lack of cooperation and housing association were the main barriers that prevented them from this step. New innovative schemes like the Energy Service Companies ESCO model with consolidated billing can be applied to address the identified barriers.

Highlights

Though there are huge energy savings in residential buildings in Lithuania, which has a large stock of old and poorly constructed multi-flat buildings, the process of refurbishment is very slow.Lithuania has set ambitious energy and climate targets for 2020, 2030, and 2050
As most of the studies have been concentrated on the economic barriers of energy renovation and the low incomes of households (Herrero, Urge-Vorsatz, 2012 [4]; Boardman, 2010 [13]), this paper aimed to overcome this gap and analyzed the main drivers and barriers of energy renovation in Lithuania and assessed willingness to pay for energy renovation
While other studies of willingness to pay (WTP) for the energy renovation of multi-apartment buildings have found that income, age, gender, education, ownership of an apartment, and environmental awareness are the key factors influencing household WTP for energy renovation, the current study did not find a relationship between age and education and WTP for energy renovation, but income, ownership, apartment size, and gender were identified as important determinants of WTP for energy renovation in Lithuania

Summary

Introduction

Though there are huge energy savings in residential buildings in Lithuania, which has a large stock of old and poorly constructed multi-flat buildings, the process of refurbishment is very slow.Lithuania has set ambitious energy and climate targets for 2020, 2030, and 2050. The country has implemented various policies and measures to promote the renovation of multi-flat buildings; these measures have not provided the expected results (Streimikiene, Balezentis, 2019 [1]). The under-studied barrier of energy renovation is the failure of owners of multi-apartment buildings to achieve common agreement on the renovation. As most of the studies have been concentrated on the economic barriers of energy renovation and the low incomes of households (Herrero, Urge-Vorsatz, 2012 [4]; Boardman, 2010 [13]), this paper aimed to overcome this gap and analyzed the main drivers and barriers of energy renovation in Lithuania and assessed willingness to pay for energy renovation

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