Energy financing in COVID-19: how public supports can benefit?

Abstract

Purpose

The study aims to empirically estimate the role of public supports for energy efficiency financing and presents the way forward to mitigate the energy financing barriers that incurred during the COVID-19 crisis.

Design/methodology/approach

Using the G7 countries data, the study estimated the nexus between the constructs. Generalized method of moments (GMM) and conventional increasing-smoothing asymptotic of GMM are applied to justify the study findings. Wald econometric technique is also used to robust the results.

Findings

The study findings reported a consistent role of public support on energy efficiency financing indicators, during the COVID-19 crisis period. G7 countries raised funds around 17% through public supports for energy efficiency financing, and it raised 4% of per unit energy usage to GDP, accelerated 16% energy efficiency and 24% output of renewable energy sources, during COVID-19. By this, study findings warrant a maximum support from public offices, energy ministries and other allied departments for energy efficiency optimization.

Practical implications

The study presents multiple policy implications to enhance energy efficiency through different alternative sources, such as, on-bill financing, direct energy efficiency grant, guaranteed financial contracts for energy efficiency and energy efficiency credit lines. If suggested policy recommendations are applied effectively, this holds the potential to diminish the influence of the COVID-19 crisis and can probably uplift the energy efficiency financing during structural crisis.

Originality/value

The originality of the recent study exists in a novel framework of study topicality. Despite growing literature, the empirical discussion in the field of energy efficiency financing and COVID-19 is still shattered and less studied, which is contributed by this study.

Citation

Iqbal, S. and Bilal, A.R. (2022), "Energy financing in COVID-19: how public supports can benefit?", China Finance Review International, Vol. 12 No. 2, pp. 219-240. https://doi.org/10.1108/CFRI-02-2021-0046