To achieve climate neutrality by 2050, the EU has set an ambitious goal to reduce net greenhouse gas emissions by at least 55% from 1990 levels and increase renewable energy by 45% by 2030. This can be achieved by energy efficiency measures or by integrating more renewable energy sources in the energy mix. Russia’s invasion of Ukraine further emphasized the EU’s need for decreasing its dependence on Russian fossil fuels.

First, we investigate the impact of energy-efficiency investments on households’ financial stability in the face of energy price shocks. We compare the financial resilience of households that adopted energy-efficient technologies – like solar panels, heat pumps, or insulation – to those that did not. Second, we investigate whether households faced with increased energy bills become more likely to invest in energy-efficient technologies and how this response depends on wealth, income and other socioeconomic factors.