Upgrading your home's energy efficiency makes your neighbors use less energy for over a decade, but only if the upgrade is visible.
March 31, 2026
Original Paper
Is Energy Efficiency Contagious? Evidence from Peer Effects in Home Retrofits
SSRN · 6496749
The Takeaway
Energy efficiency is usually seen as a private investment, but 'visible' upgrades like new windows create social contagion. When people see a neighbor's upgrade, they reduce their own utility usage by up to 2% for years—a spillover effect that doesn't happen with 'invisible' upgrades like attic insulation.
From the abstract
This paper estimates causal peer effects in residential energy consumption using Canada’s largest home energy efficiency retrofit program. We combine administrative program records with more than a decade of house-level utility data from a mid-sized Canadian city. Our identification strategy exploits spatial variation in retrofit timing and compares houses located near retrofitted homes to those near “almost retrofitted” homes, properties that completed a pre-retrofit energy audit but did not un