Retrofitting residential building envelopes for energy efficiency: motivations of individual homeowners in Israel

The willingness of private individuals in Israel to invest in energy-saving retrofit of the envelope of residential buildings was studied by means of a survey. Responses show that awareness of the need to conserve energy is high, but that willingness to participate in a retrofit project is modest and is limited to relatively small outlays. The decision on whether to retrofit at all, and then how much to invest in the project, is characterized as a two-stage process in which different factors may affect the outcome of each of the two stages. The major barrier to building retrofit is the perception (justified, in most cases) that the direct economic benefit to the homeowner from the resulting energy saving is small, and that given Israel's relatively mild climate, the payback period is very long. The stamp of approval provided by a government subsidy of 25% would have a large non-proportional effect on willingness to undertake building retrofit. Funding for the subsidy could be obtained from a Pigovian levy on electricity, applied for a limited period, and its environmental benefits outweigh the cost of the subsidy itself.