UTILITY PAYMENT ARRANGEMENT AND ENERGY CONSUMPTION IN PUBLIC FLATS

Abstract

This study attempts to establish the relationship between residential energy consumption of rented Housing Development Board (HDB) 3-bedroom flats in Singapore and the utility payment arrangement agreed between the landlord and tenant. Issues of conflicting interests between landlords and tenants as a barrier to energy efficiency may be regarded as the “principal-agent problem”. This relationship between energy consumption and utility payment arrangement has never been tested. It is hypothesized that utility payment arrangement, together with number of air-conditioners, number of tenants, term of lease, orientation of the residence, floor level of the residence and maintenance frequency, affect household energy consumption. Based on a regression model of 86 households, no statistically significant relationship was found between energy consumption and utility payment arrangement. Nonetheless, it was found that utility payment arrangement affects the consumption behaviour of the tenants, as well as the investment decision and maintenance effort of the landlords, which subsequently affect energy consumption.