Is there an emerging market for energy services targeting households and why should there be?

5.10.2015

In connection to taking up new work opportunities recently, I also needed to move myself and family to a new location. This change in life also meant moving from a less than 10-year old apartment building to an approximately 100 year old house and from owned to rented accommodation. After passing the hurdle of finding a place to live, I was faced with living in a place where I had to adopt new practices in how to use the building. Now I need to remember to open up windows for ventilation preferably during daytime to minimize heat loss and to adjust a timer for gas heating as heating throughout the day would cost too much and be too inefficient - practices that to my knowledge are very rare in Finland. My new home conditions also opened my eyes in practice, not only through research, to the challenge we are facing with making the building stock more energy efficient given the range of buildings, heating systems and building specific practices we have within Europe alone.

Reducing energy demand is a crucial global challenge in order to combat climate change and other environmental impacts associated with various energy sources. Much attention has been paid to developing and diffusing new renewable energy technologies, while energy efficiency has received much less attention politically (and otherwise), although it has a key role in energy demand reduction. It has been widely acknowledged that in particular reducing the energy demand of the building stock has great potential – contributing to circa 40% of energy use and over 30% of carbon emissions in Europe. Equally it is well known that achieving energy efficiency improvements in the building stock is very difficult and slow, both through improving new build and retrofitting the existing building stock.

The rate of change is not likely to speed up without holistic service business models. Novel ways to combine both new and existing technologies are needed as well as a holistic and systemic approach to improving buildings. Since consumers rarely have the required knowledge, services play a crucial role in the diffusion of the combinations of technologies reducing the energy demand of the building stock.

In the USE project we have found that currently only a dozen or so companies in Finland offer integrated energy services linking to buildings, and they operate predominantly in business-to-business markets. Some companies offer such services to apartment building cooperatives but only a few individual householders. For those that do, residential buildings are not a significant market segment. The present market for energy services mainly exists between the service providing companies and commercial property developers and owners. This market is seen to offer greatest potential not only through larger scale but the existence of an interested customer base.

Many experts working in the sector claim that consumers are not willing to pay for energy services, even if the end results would improve their house and save money. This is not typical only to Finland, and has been observed in other countries. Another reason may be the focus of many public policies on specific technologies rather than energy efficient outcomes. Regulations and subsidies typically come with associated administrative frameworks and procedures that may also hinder the launch of novel business models tied to holistic service concepts.

Having been both a home owner and a tenant, I can see that new service models can particularly benefit the home owners that can reap the financial and comfort benefits of reduced energy demand. However, the ways in which energy services could reach and attract landlords and tenants is not so obvious, and needs further exploration.

Paula Kivimaa is a Senior Researcher at the Finnish Environment Institute (SYKE) and a Senior Research Fellow at SPRU, University of Sussex. She leads two projects associated with building energy efficiency, one in the context of the Academy of Finland New Energy Programme and another as part of the Centre on Innovation and Energy Demand in the UK

Text: Paula Kivimaa

Viimeksi muokattu 9.3.2016
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