Evaluation of the efficiency of Chinese energy-saving household appliance subsidy policy: An economic benefit perspective. (February 2021)

• Record Type: Journal Article
• Authors: Nie, Hongguang; Zhou, Ting; Lu, Haiyan; Huang, Shupeng
• Is Part Of: Energy policy. Volume 149(2021)
• Publication Date: 2021-02
• Subjects: Energy saving subsidy -- Energy efficiency label -- Economic benefit -- Household appliance; Energy policy -- Periodicals; Politique énergétique -- Périodiques; Electronic journals; 333.79
• DOI: 10.1016/j.enpol.2020.112059
• Languages: English
• ISSNs: 0301-4215

Abstract

Abstract: China has made great efforts to control energy consumption and reduce environmental pressure in recent decades. In the residential sector, the dramatic increase in the ownership of household appliances has driven the growth of electricity consumption, which calls for effective energy-saving policies. In this study, we exemplified the sales of refrigerators in Beijing, aiming to evaluate the effectiveness of current subsidy policies for stimulating the purchase of energy-efficient household appliances. In specific, we first selected ten pairs of refrigerators from six brands having similar functions, however different in their energy efficiency grades (EEG). By applying a combination of net present value (NPV) difference method and Conversion Method of Electrical Engineering Coefficient, we calculated and compared the changes in the NPV difference and dynamic investment payback period (DIPP) to evaluate the effectiveness of the policy. The results revealed that economic benefits were mainly generated in EEG2; thereby we suggest that the government can cancel subsidies for EEG2 refrigerators, and increase the subsidy amount for EGG1 refrigerators at a potential rate of 24% in the future. Highlights: China's energy-saving subsidy policy does not reduce the purchasing price for refrigerators. Refrigerators at EEG2 have higher economic benefits than EEG1 ones regardless the subsidy policy. The influence of the policy on purchasing preference is depended on the products' service life. Government needs to adjust the weight of subsidy at different levels to improve policy efficiency.