Electrifying bills : an analysis of Maltese households' response to price shocks within utilities

Abstract

Energy prices have always been relatively cheap in the Maltese Islands. This has probably contributed to inefficient energy management within Maltese households and a general reluctance to invest in renewable energy systems. This is highly significant to the national economy since during the last decade, these households have emerged as the major energy consumers in the Islands. Nevertheless, in the meantime, a number of hefty increases in utility prices took place. The first price shock occurred in the year 1997/98, while the most recent increases commenced from the 2005 Budget, when a surcharge on the billed energy consumption was added. On a more positive note, EU accession has fostered a greater interest in energy efficiency and renewable energy. Examples of this include incentives given on solar water heaters, photovoltaics, small-scale wind turbines and energy-efficient appliances, for domestic households. This dissertation explores households' reactions to all of these changes, and the reasons behind their choices. This was carried out through interviews with Maltese households, retailers and relevant experts in renewable energy systems. The main findings indicate that the 'price shock' has forced households to better manage their energy consumption. However, such efforts have been relatively marginal. Moreover, the uptake of renewable energy systems has been minimal despite the incentives and the rise in the price of conventional energy. Thus, it is recommended that further financial incentives, coupled with a greater degree of education, should result in greater uptake of renewable energy systems and energy-efficiency measures.