The document discusses energy efficiency in the residential sector of Massachusetts. It finds that 31% of Massachusetts's total energy consumption comes from residential use. The state implemented various policies and programs to reduce residential energy consumption by 30-40% by 2020, including energy audits, retrofits, incentives for efficient appliances and lighting, and financing options like loans. These programs achieved a 3.5% reduction in residential energy use from 2000-2009. The document also compares Massachusetts' policies to those in Italy, finding that Massachusetts uses more binding targets and a greater variety of financial incentives to promote energy efficiency upgrades.

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Facoltà di Economia - Università RomaTre
Corso di Laurea Magistrale in Economia dell’Ambiente, dello Sviluppo e del
Territorio
The Challenge of Energy Efficiency
in the Residential Sector:
Nudges from Massachusetts
Tesi di Laurea in Tecnologia per lo Sviluppo e per l’Ambiente
Candidato: Eleonora Maria PaniRelatrice: prof.ssa Maria Claudia Lucchetti
Correlatore. Prof. Carlo Alberto Pratesi

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1. Successful implementation of changes depends on attitudes and perceptions
of the relevant actors.
2. Actors involved vary over the building stock as houses vary in age, size,
management and ownership.
Introduction: Energy Consumption in the Residential Sector
ITALY
24% of Total Final Energy
MASSACHUSETTS
31% of Total Final Energy
• Taking into account the Residential Sector it comes out that Italy and Massachusetts
have an equivalent value of Energy Consumption:
The above data show a high level of energy consumption that requires specific
design improvements on retrofit actions to improve energy efficiency in the existing
buildings .
• Energy efficiency aims at optimizing the energy consumption.

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 42% of natural gas demand
 28% of electricity demand
 30% of greenhouse gas emissions
Energy Consumption Massachusetts and its Experience
Energy consumption is divided in 4 main sectors -
Transportation, Industrial, Commercial and
Residential; the corresponding percentages in
Massachusetts are the following:
 Transportation  32%
 Industrial  17%
 Commercial  20 %
 Residential  31%
In USA Massachusetts represents a leading green economy that has put in place
some important actions with the aim to reduce and optimize the energy
consumption.
Good results have been achieved in the residential sector  energy
consumption has decreased approximately 3,5 % in 10 years
(2000 – 2009)
Source: U.S. Energy Information
Administration 2010

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$0,5
$1,7
$1,1
$0,6
$4,9
$3,2
$0 B
$1 B
$2 B
$3 B
$4 B
$5 B
$6 B
$7 B
Total Savings Total Costs Net Savings
Total Costs and Benefits of Electric and Gas
Energy Efficiency Plans from 2010 to 2012
Total:
$3.8 Billion
Total:
$2.2 Billion
Total:
$6 Billion
Massachusetts Clean Energy and Climate Plan (MCECP) for 2020
The good results achieved
pushed the Massachusetts
State to set up a plan for 2010
– 2020 that would cut
home energy consumption by
30 % to 40 % with the target to
save 3,8 B$ of Energy
Consumption in the first three
years.
2010 - 2012 Plan set
higher goals: Natural
gas annual savings
increase from 0,83% in
2011 to 1,5% in 2012
and electric annual
energy savings ramp up
to 2,4% in 2012 Source: ACEEE 2011
Electricity
Natural Gas
Electricity yearly Savings

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Energy assessment is offered by a local electric or gas utility or energy provider
through Mass Save.
– Collect data on building size and characteristics (i.e. energy audit with a profile of the
building).
– Collect and analyze data on energy use and costs.
– Determine potential improvements in building energy efficiency corroborated by a Life
cycle cost assessment and a choice of income-based energy programs.
Source: Lawrence Berkeley National Laboratory, 2009
MCECP – 1st Step: Energy Consumption Status Analysis
Typical Energy Use at Home
29%
17%
14%
12%
4%
11%
13%
Heating
Cooling
Water Heating
Refrigerator, dishwasher, clothes washer and dryer
Lighting
Electronics (computer, monitor, TV, DVD player)
Other (external power adapters, telephony, set-top boxes,
ceiling fans, vent fans and home audio

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Interventions designed and
implemented on existing
buildings to improve energy
performance
BUILDING ENVELOP
• Insulation of cladding, roofing and horizontal
elements.
• Replacement of windows.
THERMAL EQUIPMENT
• Replacement of plants for winter heating and
summer.
• Replacement of equipment for the production
of hot water.
MCECP– 2nd Step: Energy Consumption Typical Measures
1
ENERGY ACTION PROGRAM
ENERGY EFFICIENT LIGHTING AND APPLIANCES
Implementation of use of low consumption
lighting and energy devices.
Incentives focused on how to finance energy retrofit and awareness in local communities to
the issues of energy savings.
• Mass Save HEAT Loan Zero Interest Financing.
• Weatherization Incentive of 75 % up to 2000 $.
• Rebate of $ 300 on Central Air Conditioner or Air Source Heat Pump.
• A Bonus of $ 50 when recycle the second refrigerator or freezer.
• Subsidized training programs for practitioners.
2
3

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Energy Consumption in Italy in 2010
•Since 2001 the white certificates were
combined with an obligation to achieve a
certain target of energy savings. They certify
that a certain reduction of energy consumption
has been attained.
•The D.lgs 192/05 and subsequent
modifications and additions required an Energy
Certification for buying and selling in Italy. It is
performance based and not prescriptive.
•Tax deduction of 55% for energy retrofitting of
the buildings set up for the 1st time by the
Budget Law 296/06.
Operational Tools
Italy must realize the transposition of Directive 2010/31/Eu on the energy performance of buildings, which
repeals Directive 2002/91/EC, within 9th July 2012.
The new methodology for calculating the energy performance of buildings must take into account:
• thermal characteristics of a building (thermal capacity, insulation, etc.),
• heating insulation and hot water supply,
• air-conditioning installation,
• built-in lighting installation,
• indoor climatic conditions.
24%
35%
24%
3% 14%
Industry
Transport
Homes
Agricolture
Services
Source: EUROSTAT 2010

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Energy Efficiency Action Plan 2011
Interventions and measures
Annual savings
in 2010
GWh/year
TARGET (EEAP 2007)
2010 GWh/year 2016 GWh/year
Use of efficient heating systems 13.929 8.150 26.750
Insulated opaque surfaces in residential buildings built before 1980,
replacing single glazing with double glazing; Transposition of
Directive 2002/91/EC implementing D. Lgs. 192/05
5.832 3.722 13.730
Replacing incandescent lamps (GLS) with fluorescent lamps (CFL) 3.744 1.600 4.800
Replacing electric water heaters with more efficient ones 1.400 700 2.200
Thermal vents and high efficiency wood boilers 325 1.100 3.480
Replace refrigerators and freezers with class A + and A+ + 82 1.210 3.860
Efficient use of air conditioners 24 180 540
Replacing dishwasher with class A 21 305 1.060
Replacing washing machine with class A superlative 2 31 410
Total residential sector 25.359 16.998 56.830

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Italy and Massachusetts Energy Efficiency Policy Comparison
1. Italy and Massachusetts both developed the Energy Services Companies: ESCOs are
private companies that identify, design, and implement energy efficiency retrofits. They
often offer financial services.
2. Massachusetts issues a binding, performance based legislation promoting a good
synergy between the different actors whilst Italy has a promotional attitude which is
not best exploiting the full potential.
3. Apart from tax deduction of 55% for energy retrofitting of the buildings Italy do not
have specific financial vehicles whilst Massachusetts set up a significant range of
incentives and financial assistantship for the implementation of energy retrofitting:
• Tax breaks,
• On-bill financing,
• Green mortgage,
• Loan Zero Interest,
• Monetary incentives.

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Conclusions: Barriers and Potential Approaches
STRUCTURAL AVAILABILITY
Agency Issue
Transaction
Barriers
Pricing
Distortions
Ownership
Transfer Issues
BEHAVIOURAL
Risk and
Uncertainty
Awareness and
Information
Custom and
Habit
Elevated hurdle
Rate
Adverse
Bundling
Capital
Constraints
Product
Availability
Installation Use
STRUCTURAL AVAILABILITY
Educate users
on energy
consumption
Promote
voluntary
standards
Pricing Signals
BEHAVIOURAL
Increase
availability of
financing
vehicles
Provide
incentives and
grants
Raise Energy
Audit
Support 3rd
party
installations
BARRIERS
POTENTIAL APPROACHES
Subsidized
training
programs
Source: Mc Kinsey Report 2009,Unlocking
Energy efficiency in U.S. Economy

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LET’S MAKE ENERGY EFFICIENCY OUR FIRST FUEL
Thank You!