Quantifying the direct and indirect rebound effects for consumers as a response to energy-saving technologies in the EU-27

We estimate the rebound effect for residential space heating at the EU-27 level, which occurs when an improvement in energy efficiency results in additional energy consumption. Three types of rebound effects are distinguished, namely the direct effect, indirect effect and the embodied energy. We demonstrate that the magnitude of the direct rebound effect is highly dependent on the chosen estimation method and equation specification. The indirect rebound effect captures the effect at the macro level and is estimated using input output modeling. It includes the change in energy taxes received by the government. The results showed an estimated direct rebound effect in the range of six to 26 per cent depending on the method. The indirect effect was estimated at only one per cent. Finally, we apply the estimated values of rebound effects to heat pumps and energy efficient lighting in order to assess the impact of the diffusion of these energy saving technologies on energy consumption. We further translate the potential technical savings of these technologies into the actual expected energy savings, direct and indirect rebound effect and embodied energy