Financial barriers to residential buildings’ energy efficiency in Iran

The building sector uses a large amount of energy among all end-use sectors. This sector consumes approximately 34% of Iran’s total energy. Environmental, technical, economic, social, and legal obstacles are the main energy efficiency barriers in buildings. Economic aspects have a more significant impact than others do. This paper identifies the main financial barriers to residential buildings’ energy efficiency in Iran through interviews, questionnaires, and factor analysis. Semi-structured interviews was conducted with energy efficiency professionals. Buildings’ service engineers, project managers, architects, and facility managers completed questionnaires. The results indicate that misplaced incentives, unpriced costs and benefits, fear of hidden costs, controversial evaluation methods, distortionary fiscal and regulatory policies, focus on initial costs, and mistaken beliefs in energy efficiency are the main perspectives on financial barriers to residential buildings’ energy efficiency in Iran. Regulation, loan financing and project financing, grants and subsidies, fiscal incentives, creating real fossil fuel prices, and training and information programs are recommendations to overcome these barriers. Adapting these perspectives with corresponding strategies indicates that the human decision-making for investment in energy efficiency measures is the most critical issue for policymakers. The findings provide a helpful reference for Iranian policymakers to understand current barriers to energy-efficient buildings and develop new policies to overcome these barriers. The results also provide a valuable reference for other countries.