How do policies for efficient energy use in the household sector induce energy-efficiency innovation? An evaluation of European countries

Research on innovation induced by climate-mitigation policy has been focused predominantly on the supply side of the energy system. Despite considerable climate-mitigation potential on the demand side, less attention is given to the innovation effect of policies addressing the household sector. Based on a comprehensive data set, including 550 policy measures over 30 years (1980–2009) and covering 21 European countries, we find—based on econometric estimations—that policies targeting efficient energy use in the household sector significantly increase the number of patented energy-efficiency inventions. A comparison of the different policy types reveals a particularly strong influence from financial subsidies and energy labels. The results indicate that policies supporting early market adoption of energy-efficient technologies are effective in fostering innovation. - Highlights: • We evaluate the impact of energy-efficiency policy on energy-efficiency innovation. • The dataset covers patents and policies for 1980–2009 in 21 European countries. • Household policies show a positive influence on innovation activity (patented inventions). • The influence is most pronounced for financial subsidies and energy labels.