RELUCTANCE TO ADOPT ENERGY EFFICIENCY RENOVATION IN ...

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RELUCTANCE TO ADOPT ENERGY EFFICIENCY RENOVATION IN CHINESE HOUSEHOLDS – A BEHAVIOURAL PERSPECTIVE Jiefang Ma1, Queena K. Qian2, Kun Song3*, Henk Visscher4 1,

PhD Candidate, School of Architecture, Tianjin University, China,

OTB Research for the Built Environment, Delft University of Technology, The Netherlands, Phone +31682228254, E-mail: [email protected] 2,

Assistant Professor, OTB Research for the Built Environment, Delft University of Technology, The Netherlands 3*, 4,

Professor, School of Architecture, Tianjin University, China

Professor, OTB Research for the Built Environment, Delft University of Technology, The Netherlands * Corresponding Author Address: School of Architecture, Tianjin University, Tianjin, China Phone +8613820837073, E-mail: [email protected]

Abstract Chinese government has taken great effort to improve the energy efficiency of existing housing stock. In the northern heating region, the energy performance of existing housing stock has improved considerably through renovation projects in recent years. However, at the moment, all the renovation projects in this region are mainly government-led and government-subsidized. Besides, it is still essential to progress further in both technical and social aspects to meet the ambitious energy conservation target of residential energy efficiency renovation is 500 million square meters by 2020. To achieve the ambitious renovation target, it is urgent to executive diversified financial incentives and motivate the willingness to investment by the homeowners. The cognitive decisions of homeowners that will determine whether the renovation work could proceed smoothly, yet it appeared to be a wealth of nuances and unknowns surrounded. Many homeowners show reluctance in the renovation process, which indicates the dysfunction of policy measure and its implementation, and cause failure to meet the retrofit goals. The aim of the research is to identify the reluctance behaviour of Chinese households in residential energy efficiency renovation, and give policy implications to mitigate the problem. Semi-structured interviews are conducted to analyze the homeowners’ concerns and reasons for reluctance in adopting energy efficiency renovation. Unwilling to investment to the renovation, unsure about the renovation impact to the dwellings and energy performance, and disagree with the mechanism or procedure of the renovation are the main reasons observed. Keywords: building energy efficiency, housing renovation, decision making, behaviour

1 Residential energy efficiency renovation in China Energy efficiency and climate change are topical issues all over the world, and the building energy efficiency plays an important role. Housing energy efficiency renovation, as the main alternative means of housing supply, have a great potential of energy saving. Although the energy performance of existing dwellings is much poorer than new dwellings due to the less strict energy efficiency standard in the past, the stock of existing dwellings is very large. 1

In China, the building energy consumption accounts for 27.5% of total terminal energy consumption. With the development of industrialization and growing need of living quality, the figure is predicted to grow up to 40% at a business as usual scenario. The government set the sustainable development strategy to promote energy efficiency and emission reduction, among which building energy efficiency is one of the primary tasks. Since the thrive of property market from 2000s, many existing residential buildings are demolished and replaced by high-rise buildings, which cause massive waste of resource. In China, the Ministry of Housing and Urban–Rural Development (MOHURD) under the State Council is responsible for regulating the building industry in China. MOHURD carried out a special national inspection of building energy efficiency in 2005, and published the Civil Building Energy Conservation Ordinance in 2008. A series of building energy efficiency policy measures and regulations, including retrofit of existing residential buildings, have been implemented and further disaggregated and assigned to provincial governments. The renovation progress started during the 11th "five-year plan"(2006-2010). According to the latest government document "Comprehensive Energy Conservation and Emission Reduction Work Plan of 13th Five-year Plan" (National Development and Reform Commission, 2016), up to 2020, the target of residential energy efficiency renovation is 500 million square meters. Generally, China's Northern heating region refers to the north of the Qingling Mountain-Huaihe River line (see figure 1). First suggested by the Geographical Society of China in 1908, it is the demarcation line of northern and southern China. In 1950s, Prime Minister Enlai Zhou issued a regulation to designate northern China as district heating region, which is still in use today. Figure 1 Qingling Mountain-Huaihe River line and the northern heating region

According to the national standard "Thermal Design Code for Civil Buildings" (GB50176-93, published by General Administration of Quality Supervision, Inspection and Quarantine and MOHURD, 1993), and "Standard for Climatic Regionalization for Building and Civil Engineering" (GB50178-93, published by MOHURD, 1993), the territory of China is divided into five thermal zones by geography and climate features, considering variables such as average temperature in January and July, strength of frozen soil, maximum wind speed, annual precipitation, etc., as shown in figure 2. The northern heating region contains cold zone and 2

severe cold zone, and several second level sub-zones. Residential buildings in each zone will follow specific design and construction regulations, such as minimum wall thickness, thermal resistance of envelope, window-wall ratio, air curtain at the doorway, etc. Figure 2 The division of China climate zones (re-adapted from Hong, 2009)

2 Major renovation measures in the northern heating region, China Currently, China's Northern heating region contains approximately 6.5 billion square meters of residential living space, of which 90% is considered energy inefficiency (Lv & Wu, 2009). Many of the existing residential buildings built from 1970s to 2000 are suffering problems, such as inadequate infrastructure, lacking of open space, low utilization of renewable energy, narrow interior space, etc. In the Northern heating region, an average residential winter heating energy consumption of about 25 kgce/m2, which is 2–3 times higher than that of developed countries (Office of the National Energy Leading Group, 2007). According to the features of existing residential buildings in the northern heating region, the renovation mainly contains three aspects: heat meters and temperature regulation of heating system, heat balance of heat source and network, energy efficiency of building envelope (MOHURD, MOF, 2008). District heating is the most common type of heating system in residential buildings built before 2000s, which is proved to be problematic in operation and management. Hydraulic disequilibrium and the lack of heat metering lead to heat load imbalances among residential structures (Lv & Wu, 2009). Households cannot adjust the temperature or turn off the heater during absence. Upside-feed-underside-return flow results in a gradient trend across the floors, i.e. the indoor temperature of rooms on the top floor will be significantly higher than floors lower. Therefore, it causes in the same building, some residents must open windows to eliminate excess heat, while others suffer from low indoor temperature, even below 18 °C minimum standard of indoor heat comfort. The circulating water system not only makes heat metering impossible, but also increase the difficulties in maintenance. All these above give rise to the urgency of heating-system renovation. However, the renovation is difficult to achieve due to the variety in forms of the building structure. In some cases the renovation will do damage to the structure, and will affect the dweller’s daily life to a large extent. Envelope insulation is also a determinant of building energy efficiency and indoor thermal environment. Decades ago, most of residential buildings in the northern heating region were built without sufficient 3

insulation materials due to the lack of mandatory energy efficiency standards. Moreover, the thermal insulation of external windows and doors in most of these cases were at an even lower level. In the heating season in winter, thermal bridges exist in many parts of the envelopes and aggravate the heating loss. Optimization of envelope insulation can improve both energy efficiency and indoor thermal comfort in a passive way. With the emergence of new materials and thrive of technique, upgrading envelope insulation has turned out to be one of the most popular measures to improve energy performance of existing buildings.

3 Household reluctance behaviour and its implication on energy efficiency renovation Even though the energy performance of Chinese existing housing stock has improved through renovation projects in recent years, it is still essential to progress further in both technical and social aspects to meet the ambitious energy conservation target. However, it appears to be very difficult to achieve the large-scale deep renovation in the existing housing stock and really make a step forward towards the energy efficiency goals. Despite of numerous advantages, the current policy instruments have not adequately addressed several major barriers, including the reluctance of the homeowners. The primary beneficiaries of current policy are developers and energy companies. Homeowners, as a stakeholder of the renovation, are seldom taken into consideration. Under the increasingly pressure of time, it is crucial to ensure the intended project time period and minimize the risks. Institutionally, China has benefited from the centralized MOHURD (Ministry of Housing and Urban–Rural Development) and the network of municipal Construction Commissions. Government is the initiator and major investor of the renovation. Apart from the technical measures, to achieve the ambitious renovation target, it is urgent to executive diversified renovation mechanism and motivates the homeowners to coordinate the renovation process. It is the behaviour of homeowners that will determine whether the renovation work is able to proceed smoothly. However, Perspectives and insights of the concerns and behaviour of the homeowners are often ignored. In energy efficiency renovation, individuals’ behaviour may be understood and interpreted as a choice concerning environmentally friendly in terms of their energy consumption or energy use. Most people are positive towards environmental protection, but they do not necessary act in accordance with these attitudes (Hauge et al., 2013). Before the renovation, the decisions of homeowners will determine whether an agreement towards energy efficiency renovation is to be made. Residential energy efficiency renovation can be defined as innovation in the housing domain, and sequentially, the homeowners’ reluctance behaviour is actually the resistance towards innovation in essence. In this research, the households’ reluctance behaviour in energy efficiency renovation can be defined into 3 stages base on the manifestation form and severity level, namely postponement, rejection and opposition. The division method follows the research of Cornescu and Adam in 2013, which is derived from several previous research from the domain of consumer behaviour.

4 Method Semi-structured in-depth interview are conducted to 29 participants of 20 households in the northern heating region in China, from 12 provinces, municipalities and autonomous regions distributed throughout the cold and severe-cold zone of the northern heating region. The aim is to explore their knowledge and attitude 4

towards environment protection, household energy consumption and residential energy efficiency renovation. The structured interview questions are more flexible, making the participants feel relaxed. The aim of the interview is to capture the overlooked reasons of households' reluctance behavior or concerns towards residential energy efficiency renovation, and further discuss the potential influencing factors, and to provide policy implications accordingly. The screening criteria of the sample selection: the homeowners have been living in China's northern heating region for at least 20 years. On this condition, it is ensured that the interviewees have enough understanding of current conditions and developing tendency in the region, and have developed stable life style. The design of the interview follows the principle that interviewees should be able to easily understand and response to the questions during the interview, even though they might not have full knowledge of energy efficiency renovation. In the previous research, the influence of household characteristics and user profiles on behaviour pattern has widely been recognized and discussed (Biesiot & Noorman, 1999; Liao & Chang, 2002; Vringer, 2005; Linden et al, 2006; Steg & Vleg, 2009; Guerra-Santin & Itard, 2010; Sunikka-Blank & Galvin, 2012; Yohanis, 2012; Kavousian et al., 2013, etc.); These variables are taken into consideration in the analysis of the results, but not set as filters in the selection of interviewee, to guarantee the randomness of the sample. Therefore, the three stages of the interview are designed step by step, see table 1. In each stage, there are heuristic questions at the beginning. According to their answer, the interviewer will give feedbacks, then continue asking more questions without inducing, and encourage them to describe their feelings and opinions in more details. The responds to the questions is either household as a whole (e.g. household behaviour patterns) or individual (e.g. attitudes towards renovation). Interview lasts 1.5 hour in average. Table 1 Interview outline Topic

Alternate questions How long have you been living in your current residence? How many bedrooms do you have?

Stage 1

How many hours do you stay at home per week?

Household characteristics

Is the heater in your home adjustable?

and life style

Are you satisfied with the indoor temperature in winter? Do you use additional heating appliances? What is your annual household income? Will you switch off the coffee machine when you finish using it?

Stage 2 Attitude towards building energy efficiency and environmental protection

Will you take notice of the energy label when purchasing household appliances? Do you think individual’s behaviour matters in the global environmental issues? Compared to your childhood, have your opinions toward energy consumption changed significantly? If so, when and why did it happen? Is residential energy efficiency renovation taking place in your city? How many ways do you know to improve the housing energy efficiency?

Stage 3

Are you willing to invest in improving the energy efficiency of your dwelling?

Considerations in residential

Do you tend to renovate your home or in favor of buying additional appliances

energy efficiency renovation

when you are not satisfied with the indoor comfort level? 5

Which one do you prefer, undertaking energy efficiency renovation or purchasing energy efficiency appliances/products? To what extent will your neighbor’s attitude influence your willingness to undertake energy efficiency renovation? To what extent will brand advertisements influence your willingness to undertake energy efficiency renovation? To what extent will government’s campaigns influences your willingness to undertake energy efficiency renovation? To what extent will experts’ advice influence your willingness to undertake energy efficiency renovation? Do you think energy efficiency renovation will reduce your energy bill in the future? Do you think energy efficiency renovation will raise your property value?

The sample households are from 12 provinces, municipalities and autonomous regions distributed throughout the cold and severe-cold zone of the northern heating region. The dwelling typology is private property single-family apartments built from 1970s to 2000s in urban and suburban areas. It is the most common type in the northern heating region as well as the primary target of energy efficiency renovation. The household characteristics are summarized in Table 2. Table 2 Household characteristics statistics from the interview Household characteristics

Number

%

Household characteristics

Floor area (m2) ≤50 50<x≤100 >100

Number

%

Heating system 2

10

District heating (unadjustable)

8

40

10

50

Number of bedrooms

14

70

District heating (adjustable)

2

10

Household heating (unadjustable)

1

5

Household heating (adjustable)

2

10

Heat metering

1

5

1

2

10

2

5

25

3

7

35

Never

7

35

4 or more

6

30

Self-funding

5

25

Government arranged

4

20

Both

4

20

Yes

4

20

No

16

80

Energy efficiency renovation

Family composition Single

3

15

Couple

12

60

Presence of elderly persons

5

25

(≥60 years old)

Couple and child Household annual income (¥) ≤60,000 60,000<x≤120,000 >120,000

1

5

Presence of child (≤12 years old)

11

55

Yes

2

10

8

40

No

18

90

6

5 Results and Discussions Reasons for households’ reluctance behavior in energy efficiency renovation -

Unwilling to investment to the renovation

Financial problem is one of the most significant challenges in residential energy renovation. In the ranking of their purchase and investment behaviour, consideration of “saving money”, “improving comfort level” or “environmental friendly” 21 out of 29 participants gave their priority to saving money. It is not surprising that most homeowners will be reluctant if they cannot predict the actual benefits before investing in the renovation. Moreover, during home renovation in general, energy efficiency features often not the first choice entirely ignored by the homeowners. Partially it is because energy bill take only t a small portion of the total living expense. They have interests on issues, such as comfort, health, holiday travels, and other investment. “Compared to energy efficiency renovation, I’d rather pay for something that is more meaningful for example “lift”. In the building where I live, there is no lift, and I’m 64 years old living on the 6th floor. I’m afraid that five years later I’ll not be able to climb so many stairs anymore.” In other cases, people are willing to invest in environmental protection. However, the connection between energy efficiency renovation and general environmental protection are not clear to them. They are unaware of the fact energy efficiency renovation will result in cost savings over the long run through lower energy consumption. “Environmental protection really matters to me. When I buy appliances, I always check the energy label and choose the one with better energy performance, even if it is more expensive. (Interviewer: How many high-power electrical appliances do you have?) … about 10 to 15 … wait, that’s quite a lot. (Interviewer: Such big numbers of appliances added together are not environmental friendly.) … Yes, it’s true. I’ve never thought in this way before.” Although people will treat their investment decision with caution, it cannot be ignored that 5 out of 20 households in the interview initiatively renovated their home at their own expenses, such as the retrofit of heat pump, replacement of windows and installation of solar heater. If the renovation operated by the government come later than the initiative behaviour, such households might be reluctant to the duplicate investment. In some extreme cases, homeowners were asked to demolish their new-installed windows and adopt the uniform type. However, all of the 7 households are willing to undertake additional renovation, because they are satisfied with the effect of the previous measures. -

Unsure about the renovation impact to the dwellings and energy performance

Before the renovation, the occupants are rarely informed with the intended energy performance. Compared with accepting the unknowns, many homeowners inclined to stick to their current dwelling’s condition without renovation. Regarding the “satisfaction on indoor temperature”, there is a wide range of satisfaction levels among the interviewees. Some interviewees express their satisfactions but with the excess high temperature: “I’m very satisfied with the indoor temperature now – feels like summer in winter. It allows me to enjoy ice-cream at home with few clothes on, even if it is snowing outside. If the heating system is to be renovated, I’m not sure whether I can still enjoy it. Maybe I have to pay more to reach the 7

same temperature as it is now, or it might even be impossible at all.” Moreover, sensible temperature is not the only factor in homeowners’ overall rating of indoor thermal environment. Some household in the severe cold zone will take advantages of the chill: “The balcony is always very cold at my home, because when the building was built in 1985, the thermal insulation material was fixed to the wall between balcony and living room. In the past 30 years, we use the balcony as a free refrigerator in winter. The low temperature will keep vegetables fresh. We don’t need extra insulation system on the external walls. We’ll lose our ‘refrigerator’ forever, and have to consume more electricity for food storage.” Some other interviewees claimed that the renovation will influence the function of usable area at their home. Such estimation is usually due to some common misunderstanding of the renovation measures, e.g. the difference between external and internal thermal insulation system. Due to the lack of information and knowledge to the renovation measures, the homeowners are quite likely to confuse the operation mechanism and intended effect of the concepts. Because of the thickness of the material as well as installation method, internal insulation will slightly “squeeze” the area of the room, and result in some limitations in the space or function of the walls. However, the fact is internal insulation is generally used only in the interior finishing of newly constructed housing, and is seldom being applied in existing energy efficiency renovation. In a more common situation, the actual energy consumption of some least energy-efficient apartments is much less than predicted in theory, so-called “prebound effect”. If the energy is not consumed, it is inapplicable to solve the problem that is not exist. Statements of interviewees clearly demonstrate the phenomenon. In poorly insulated home, residents are cautious about energy consumption. This challenges the prevailing view that large cuts in energy consumption can be achieved by focusing purely on technical solutions (Sunikka-Blank, 2012). -

Disagree with the mechanism or procedure of the renovation

Traditionally, the energy efficiency renovation of China’s housing stock is implemented through a top-down model. When the renovation program is decided, staff from government functional department or property management company will ask for household’s agreement from door to door. If two-third of the households agree on the program, it is considered to be executable. However, most households will react indifferently due to the lack of information/knowledge towards the renovation. In the meanwhile, the traditional educational programs or mass media campaigns often fail in such cases. “I’d love to renovate my home, but I wish I could plan it by myself, or at least be involved in the decision-making process. I want to know what measures are going to be taken. I don’t like it when a team of workers just come to the building and do the renovations without informing me what’s going on. And I really suspect if there are commercial interests between the government, construction team and suppliers. All in all, I don’t want to just passively accept everything.” One suggestion for such situation would be, to ensure the public engagement and listen to the homeowners’ opinions. Communicative instruments should be taken to encourage interaction among residents. The intervention of neighborhood committee will enhance the degree of the public participation, cooperation and mobilization. Another situation that can be classified in this category is the consequence of illegal occupation of public space. In some cases, the energy efficiency renovation involves public corridors, lobbies, roofs and greenings. Interviewees complained that their neighbors occupied such spaces to build green houses, family gardens and 8

storerooms, which disregarded the public interest of other dwellers. During the renovation, the illegal structures have to be demolished, and their constructors will be strongly opposed to the process. Usually they will be strongly opposed to the renovation, or ask for large amounts of monetary compensation, which is a hassle to the government and property management company. Negotiation in such cases will be troublesome and time-consuming.

6 Conclusion and policy implications Stimulating energy efficiency is an important part of many policy strategies aimed at addressing energy and climate policy objectives. Experiences and practices have shown that well-designed policies can result in substantial energy savings (Geller et al., 2006). Current policy instruments and incentives in practice can be structured into 3 main categories: regulatory instruments, economic instruments and communicative instruments (Itard, 2008). The main applied incentives for sustainable renovation are subsidies, tax reductions and publicity campaigns (Itard and Meijer, 2008). However, the route to achieving policy targets is difficult and therefore attainment of policy targets is expected to be problematic (Meijer et al., 2009). Based on the result of the interview, some policy implications of studying household reluctance behaviour are to be summarized. The purpose of this research is to identify the reasons for the reluctance behaviour of Chinese households in the northern heating region to energy efficiency renovation, under the current mechanism of top-down model. Interview of 20 households (29 interviewees in total) was conducted to collect their reasons for reluctance behaviour behind the home energy renovation decisions. Most of the interviewees expressed their positive attitudes towards environmental protection; however their attitudes are not necessarily translated into their decisions towards energy renovation. Especially in the case of the renovations operated by the government, the results indicate the discrepancy between relevant policy design and its implementation effectiveness. As evidenced by the interview, environmental issues have successfully drawn the public awareness of Chinese residents in the urban and suburban area. It is very likely that the environmental-friendly attitude will be mapped into their actual behaviour in renovating their own home. Besides the demand of indoor comfort level and the effect of monetary incentives, several motivations can significantly affect people’s willingness, such as neighborhood influence and sense of social responsibility. Experience from the front-runners has discovered that homeowners' positive attitudes were particularly important for the agreement of successful renovation. In order to promote residential efficiency renovation from a bottom-up approach, and improve the living conditions of residents, it is essential for policy-makers to be able to understand and predict household behaviour. Some interviewees described their environmental-friendly behaviour in both daily life and energy efficiency renovation. However, seemingly “irrational” behaviour of the homeowners can be observed in many cases. In previous research about the feasibility of housing renovation, one of the basic assumptions of homeowner’s willingness is that a rational homeowner will be adopt the renovation only when he or she could either benefit financially or at least break even. Properly designed policy can help alter people’s behaviour and mitigate the reluctance in energy efficiency renovation by encouraging people to make conscious and controlled decisions that are friendly to the environment.

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Acknowledgement: Supported by Key Projects of Philosophy and Social Sciences Research, Ministry of Education of the People’s Republic of China (Grant No: 15JZD025) and China Scholarship Council. The second author is thankful for the Delft Technology Fellowship grant (2014-2019) for its generous research support. References: Bao, L., Zhao, J., & Zhu, N. (2012). Analysis and proposal of implementation effects of heat metering and energy efficiency retrofit of existing residential buildings in northern heating areas of China in “the 11th Five-Year Plan” period. Energy policy, 45, 521-528. Biesiot, W., & Noorman, K. J. (1999). Energy requirements of household consumption: a case study of The Netherlands. Ecological Economics, 28(3), 367-383. Cornescu, V., & Adam, C. R. (2013). The Consumer Resistance Behavior towards Innovation. Procedia Economics and Finance, 6, 457-465. Frederiks, E. R., Stenner, K., & Hobman, E. V. (2015). Household energy use: Applying behavioural economics to understand consumer decision-making and behaviour. Renewable and Sustainable Energy Reviews, 41, 1385-1394. Galvin, R. (2014). Why German homeowners are reluctant to retrofit. Building Research & Information, 42(4), 398-408. Geller, H., Harrington, P., Rosenfeld, A. H., Tanishima, S., & Unander, F. (2006). Polices for increasing energy efficiency: Thirty years of experience in OECD countries. Energy policy, 34(5), 556-573. Hauge, Å. L., Thomsen, J., & Löfström, E. (2013). How to get residents/owners in housing cooperatives to agree on sustainable renovation. Energy Efficiency, 6(2), 315-328. Itard, L. (2008). Towards a Sustainable Northern European Housing Stock: Figures, Facts, and Future (Vol. 22). Ios Press. Itard, L., Meijer, F., Vrins, E., & Hoiting, H. (2008). Building renovation and modernisation in Europe: state of the art review. Final Report ERABUILD, Delft, 31. Kavousian, A., Rajagopal, R., & Fischer, M. (2013). Determinants of residential electricity consumption: Using smart meter data to examine the effect of climate, building characteristics, appliance stock, and occupants' behavior. Energy, 55, 184-194. Kern, F., Kivimaa, P., & Martiskainen, M. (2017). Policy packaging or policy patching? The development of complex energy efficiency policy mixes. Energy Research & Social Science, 23, 11-25. Liao, H. C., & Chang, T. F. (2002). Space-heating and water-heating energy demands of the aged in the US. Energy Economics, 24(3), 267-284. Lindén, A. L., Carlsson-Kanyama, A., & Eriksson, B. (2006). Efficient and inefficient aspects of residential energy behaviour: What are the policy instruments for change?. Energy policy, 34(14), 1918-1927. Liu, L., Fu, L., Jiang, Y., & Guo, S. (2011). Major issues and solutions in the heat-metering reform in China. Renewable and Sustainable Energy Reviews, 15(1), 673-680.

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