Scientific article
Open access

Investment in energy efficiency: do the characteristics of investments matter?

Published inEnergy Efficiency, vol. 5, no. 4, p. 497-518
Publication date2012

“Investment in energy efficiency: do the characteristics of firms matter?” In their famous 1998 paper, DeCanio and Watkins raised the question and answered it affirmatively. Our paper addresses a parallel question: “Investment in energy efficiency: do the characteristics of investments matter?” To answer this question, we first describe our new investment decision-making model, applicable to all investment types. We then discuss our research results, based on questionnaires submitted to finance managers of 35 major electricity consumers in various commercial and industrial sectors. We show how characteristics other than profitability play an important role in investment choices. The investment category influences profitability evaluation, profitability requirement, and, ultimately, the decision made. For half of the firms in our study, energy-efficiency investments did not exist as a category. However, wide diversity regarding investment behavior is observed between firms. Our findings lead to a different explanation of the energy-efficiency gap and open the way for a new approach to promoting energy-efficiency investments, which is briefly discussed in the conclusion.

  • Corporate finance
  • Capital budgeting
  • Investment decision-making
  • Strategic decision-making
  • Organization behavior
  • Energy-efficiency investments
  • Energy-efficiency gap
Citation (ISO format)
COOREMANS, Catherine. Investment in energy efficiency: do the characteristics of investments matter? In: Energy Efficiency, 2012, vol. 5, n° 4, p. 497–518. doi: 10.1007/s12053-012-9154-x
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Article (Published version)
ISSN of the journal1570-646X

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