Improving the energy efficiency of homes in Italy: the state of the art and some considerations for public intervention

The European energy efficiency (EE) regulations for housing impose significant obligations on households within a limited time frame. This paper describes the background to the regulatory framework, housing and occupants' characteristics, the economic literature on the costs and benefits of EE investment, and the role of the public sector, financial intermediaries and the private sector. Some considerations for designing measures aimed at increasing investments in EE are then proposed. A critical issue is the poor availability of data on housing energy efficiency, energy consumption and past incentive measures, which would need to be improved to both develop market solutions (the contribution of banks and the private sector to EE investment) and correctly design public policy measures. In addition, in light of public finance constraints, public intervention should focus on less well-off households, which are more likely to live in inefficient housing and to be subject to liquidity constraints, and concentrate on the measures best suited to improving energy efficiency. Our findings also suggest supplementing tax incentives with other instruments and providing adequate and reliable coverage.