6.7.8 Other barriers
Due to space limitations, not all barriers to energy efficiency identified in Table 6.5 can be detailed here. Other important barriers in the buildings sector include the limited availability of capital and limited access to capital markets of low-income households and small businesses, especially in developing countries (Reddy, 1991); limited availability of energy-efficient equipment along the retail chain (Brown et al., 1991); the case of poor power quality in some developing countries interfering with the operation of the electronics needed for energy efficient end-use devices (EAP UNDP, 2000); and the inadequate levels of energy services (e.g., insufficient illumination levels in schools, or unsafe wiring) in many public buildings in developing countries and economies in transition. This latter problem can severely limit the cost-effectiveness of efficiency investments, since a proposed efficiency upgrade must also address these issues, offsetting most or all of the energy and cost savings associated with improved efficiency and in turn make it difficult to secure financing or pay back a loan from energy cost savings.
Table 6.5: Taxonomy of barriers that hinder the penetration of energy efficient technologies/practices in the buildings sector
| Barrier categories | Definition | Examples |
|---|
| Financial costs/benefits | Ratio of investment cost to value of energy savings | Higher up-front costs for more efficient equipment |
| Lack of access to financing |
| Energy subsidies |
| Lack of internalization of environmental, health and other external costs |
| Hidden costs/benefits | Cost or risks (real or perceived) that are not captured directly in financial flows | Costs and risks due to potential incompatibilities, performance risks, transaction costs etc. |
| Poor power quality, particularly in some developing countries |
| Market failures | Market structures and constraints that prevent the consistent trade-off between specific energy-efficient investment and the energy saving benefits | Limitations of the typical building design process |
| Fragmented market structure |
| Landlord/tenant split and misplaced incentives |
| Administrative and regulatory barriers (e.g., in the incorporation of distributed generation technologies) |
| Imperfect information |
| Behavioural and organizational non-optimalities | Behavioural characteristics of individuals and organizational characteristics of companies that hinder energy efficiency technologies and practices | Tendency to ignore small opportunities for energy conservation |
| Organizational failures (e.g., internal split incentives) |
| Non-payment and electricity theft |
| Tradition, behaviour, lack of awareness and lifestyle |
| Corruption |