Learning energy efficiency: experience curves for household appliances and space heating, cooling, and lighting technologies

Improving demand side energy efficiency is an important strategy for establishing a sustainable energy system. Large potentials for energy efficiency improvements exist in the residential and commercial buildings sector. This sector currently accounts for almost 40% of the European Union’s (EU) final energy demand and offers the largest energy efficiency potentials among all economic sectors in the EU. The extent, to which existing efficiency potentials can be exploited, depends largely on the development, market implementation, and market diffusions of innovative novel and efficient technologies. The market diffusion of novel technologies depends on a variety of factors1, with up-front consumer investment costs, i.e., product prices being one of the most crucial. One key barrier for the market success of novel and efficient energy demand technologies is hence their high initial production costs. Novel technologies are often expensive at the phase of their market introduction but become cheaper with technological and organizational progress, upscaling of production – i.e., with technological learning and the gaining of experience in manufacturing processes and subsequent value chains. Technological learning is hence a key driver for realizing both cost reductions and efficiency potentials related to efficient energy demand technologies. It is hence of vital importance for strategic decision making to gain detailed insight into the rate of past cost reductions and into future cost reduction potentials for relevant energy demand technologies.