Housing affordability pertains to the capacity of a given household to pay their rent or mortgage in relation to their financial means. Considering the criticism of the concept when viewed as a strict ratio rule between income and housing expenses (Hulchanski, 1995), it may be useful to focus on the relational nature of the concept and as a way to analyze the relationship between different processes. As Whitehead (2007, p. 30) contended, affordability is a composite of three main parameters: (1) housing cost, (2) household income and (3) direct state interventions (or third-actors) playing on the previous two factors, for instance by improving one’s capacity to pay through direct payments or by reducing housing costs through subsidized housing. Considering the current trend towards unaffordability in European cities (Dijkstra and Maseland, 2016, p. 96), the concept is particularly useful to understand the interplay of factors that both favour rising housing costs—through financialization (Aalbers, 2016), gentrification (Lees, Shin and López Morales, 2016), and entrepreneurial urban policies (Harvey, 1989)—with those that enable the stagnation of low- and middle-incomes, namely Neoliberal globalization (Jessop, 2002) the precarization of work and welfare policy reforms (Palier, 2010). The “hard reality” behind one’s home affordability can therefore be construed as the result of a complex interplay between large-scale processes such as those enumerated above, behind which lie the aggregated behaviours of a multitude of actors; from the small landlord to the large investment firm seeking to speculate in global real-estate markets, from the neighborhood association protecting tenants from evictions to national governments investing (or divesting) large sums of money into housing programs. The conceptual strength of affordability lies in its capacity to scrutinize a wide range of complexly interconnected phenomena, which ultimately affect greatly everyone’s quality of life.    

Environmental Retrofit Buildings are responsible for approximately 40% of energy consumption and 36% of carbon emissions in the EU (European Commission, 2021). Environmental retrofit, green retrofit or low carbon retrofits of existing homes ais to upgrade housing infrastructure, increase energy efficiency, reduce carbon emissions, tackle fuel poverty, and improve comfort, convenience and aesthetics (Karvonen, 2013). It is widely acknowledged that environmental retrofit should result in a reduction of carbon emissions by at least 60% in order to stabilise atmospheric carbon concentration and mitigate climate change (Fawcett, 2014; Johnston et al., 2005). Worldwide retrofit schemes such as RetrofitWorks, EnerPHit and the EU’s Renovation Wave, use varying metrics to define low carbon retrofit, but their universally adopted focus has been on end-point performance targets (Fawcett, 2014). This fabric-first approach to retrofit prioritises improvements to the building fabric through: increased thermal insulation and airtightness; improving the efficiency of systems such as heating, lighting and electrical appliances; and the installation of renewables such as photovoltaics (Institute for Sustainability & UCL Energy Institute, 2012). The whole-house systems approach to retrofit further considers the interaction between the occupant, the building site, climate, and other elements or components of a building (Institute for Sustainability & UCL Energy Institute, 2012). In this way, the building becomes an energy system with interdependent parts that strongly affect one another, and energy performance is considered a result of the whole system activity. Economic Retrofit From an economic perspective, retrofit costs are one-off expenses that negatively impact homeowners and landlords, but reduce energy costs for occupants over the long run. Investment in housing retrofit, ultimately a form of asset enhancing, produces an energy premium attached to the property. In the case of the rental market, retrofit expenses create a split incentive whereby the landlord incurs the costs but the energy savings are enjoyed by the tenant (Fuerst et al., 2020). The existence of energy premiums has been widely researched across various housing markets following Rosen’s hedonic pricing model. In the UK, the findings of Fuerst et al. (2015) showed the positive effect of energy efficiency over price among home-buyers, with a price increase of about 5% for dwellings rated A/B compared to those rated D. Cerin et al. (2014) offered similar results for Sweden. In the Netherlands, Brounen and Kok (2011), also identified a 3.7% premium for dwellings with A, B or C ratings using a similar technique. Property premiums offer landlords and owners the possibility to capitalise on their  retrofit investment through rent increases or the sale of the property. While property premiums are a way to reconcile          split incentives between landlord and renter, value increases pose questions about long-term affordability of retrofitted units, particularly, as real an expected energy savings post-retrofit have been challenging to reconcile (van den Brom et al., 2019). Social Retrofit A socio-technical approach to retrofit elaborates on the importance of the occupant. To meet the current needs of inhabitants, retrofit must be socially contextualized and comprehended as a result of cultural practices, collective evolution of know-how, regulations, institutionalized procedures, social norms, technologies and products (Bartiaux et al., 2014). This perspective argues that housing is not a technical construction that can be improved in an economically profitable manner without acknowledging that it’s an entity intertwined in people’s lives, in which social and personal meaning are embedded. Consequently, energy efficiency and carbon reduction cannot be seen as a merely technical issue. We should understand and consider the relationship that people have developed in their dwellings, through their everyday routines and habits and their long-term domestic activities (Tjørring & Gausset, 2018). Retrofit strategies and initiatives tend to adhere to a ‘rational choice’ consultation model that encourages individuals to reduce their energy consumption by focusing on the economic savings and environmental benefits through incentive programs, voluntary action and market mechanisms (Karvonen, 2013). This is often criticized as an insufficient and individualist approach, which fails to achieve more widespread systemic changes needed to address the environmental and social challenges of our times (Maller et al., 2012). However, it is important to acknowledge the housing stock as a cultural asset that is embedded in the fabric of everyday lifestyles, communities, and livelihoods (Ravetz, 2008). The rational choice perspective does not consider the different ways that occupants inhabit their homes, how they perceive their consumption, in what ways they interact with the built environment, for what reasons they want to retrofit their houses and which ways make more sense for them, concerning the local context. A community-based approach to domestic retrofit emphasizes the importance of a recursive learning process among experts and occupants to facilitate the co-evolution of the built environment and the communities (Karvonen, 2013). Involving the occupants in the retrofit process and understanding them as “carriers” of social norms, of established routines and know-how, new forms of intervention  can emerge that are experimental, flexible and customized to particular locales (Bartiaux et al., 2014). There is an understanding that reconfiguring socio-technical systems on a broad scale will require the participation of occupants to foment empowerment, ownership, and the collective control of the domestic retrofit (Moloney et al., 2010).

Buildings are responsible for approximately 40% of energy consumption and 36% of greenhouse gas emissions in the EU (European Commission, 2021). Energy retrofit is also referred to as building energy retrofit, low carbon retrofit, energy efficiency retrofit and energy renovation; all terms related to the upgrading of existing buildings energy performance to achieve high levels of energy efficiency. Energy retrofit significantly reduces energy use and energy demand (Femenías et al., 2018; Outcault et al., 2022), tackles fuel (energy) poverty, and lowers carbon emissions (Karvonen, 2013). It is widely acknowledged that building energy retrofit should result in a reduction of carbon emissions by at least 60% compared with pre-retrofit emissions, in order to stabilise atmospheric carbon concentration and mitigate climate change (Fawcett, 2014; Outcault et al., 2022). Energy retrofit can also improve comfort, convenience, and aesthetics (Karvonen, 2013). There are two main approaches to deep energy retrofit, fabric-first and whole-house systems. The fabric-first approach prioritises upgrades to the building envelope through four main technical improvements: increased airtightness; increased thermal insulation; improving the efficiency of systems such as heating, lighting, and electrical appliances; and installation of renewables such as photovoltaics (Institute for Sustainability & UCL Energy Institute, 2012). The whole-house systems approach to retrofit further considers the interaction between the climate, building site, occupant, and other components of a building (Institute for Sustainability & UCL Energy Institute, 2012). In this way, the building becomes an energy system with interdependent parts that strongly affect one another, and energy performance is considered a result of the whole system activity. Energy retrofit can be deep, over-time, or partial (Femenías et al., 2018). Deep energy retrofit is considered a onetime event that utilises all available energy saving technologies at that time to reduce energy consumption by 60% - 90% (Fawcett, 2014; Femenías et al., 2018). Over-time retrofit spreads the deep retrofit process out over a strategic period of time, allowing for the integration of future technologies (Femenías et al., 2018). Partial retrofit can also involve several interventions over time but is particularly appropriate to protect architectural works with a high cultural value, retrofitting with the least-invasive energy efficiency measures (Femenías et al., 2018). Energy retrofit of existing social housing tends to be driven by cost, use of eco-friendly products, and energy savings (Sojkova et al., 2019). Energy savings are particularly important in colder climates where households require greater energy loads for space heating and thermal comfort and are therefore at risk of fuel poverty (Sojkova et al., 2019; Zahiri & Elsharkawy, 2018). Similarly, extremely warm climates requiring high energy loads for air conditioning in the summer can contribute to fuel poverty and will benefit from energy retrofit (Tabata & Tsai, 2020). Femenías et al’s (2018) extensive literature review on property owners’ attitudes to energy efficiency argues that retrofit is typically motivated by other needs, referred to by Outcault et al (2022) as ‘non-energy impacts’ (NEIs). While lists of NEIs are inconsistent in the literature, categories related to “weatherization retrofit” refer to comfort, health, safety, and indoor air quality (Outcault et al., 2022). Worldwide retrofit schemes such as RetrofitWorks and EnerPHit use varying metrics to define low carbon retrofit, but their universally adopted focus has been on end-point performance targets, which do not include changes to energy using behaviour and practice (Fawcett, 2014). An example of an end-point performance target is Passivhaus’ refurbishment standard (EnerPHit), which requires a heating demand below 25 kWh/(m²a) in cool-temperate climate zones; zones are categorised according to the Passive House Planning Package (PHPP) (Passive House Institute, 2016).  

Improving indoor thermal comfort is a widely agreed motivate for housing retrofit (Femenías et al., 2018; Outcault et al., 2022; Sojkova et al., 2019; Zahiri & Elsharkawy, 2018). Low carbon retrofit of existing social housing tends to be driven by cost, the use of eco-friendly products, and energy savings (Sojkova et al., 2019). Energy savings are particularly important in colder climates where households require larger energy loads for space heating and thermal comfort and are therefore at greater risk of fuel (energy) poverty (Sojkova et al., 2019; Zahiri & Elsharkawy, 2018). Femenías et al.’s (2018) extensive literature review on property owners’ attitudes to energy efficiency argues that renovations are typically motivated by other needs, referred to by Outcault et al (2022) as ‘non-energy impacts’ (NEIs). While lists of NEIs are inconsistent in the literature, categories related to “weatherization retrofit” (Outcault et al., 2022, p.3) refer to comfort, modernity, health, safety, education, and better indoor air quality (Amann, 2006; Bergman & Foxon, 2020; Broers et al., 2022; Outcault et al., 2022). In poorly maintained social housing, however, the desire to improve indoor air quality and thermal comfort will have an impact on energy consumption. Occupants will, for example, use extra heating to feel comfortable in a damp, mouldy, or cold home. (Zahiri & Elsharkawy, 2018).   There are three main technical improvements to low carbon retrofit: (1) enhancing the building fabrics thermal properties; (2) improving systems efficiency; and (3) renewable energy integration (Institute for Sustainability & UCL Energy Institute, 2012). In order for the Passivehaus Institut’s EnerPHit Retrofit Plan to meet Passivhaus standards for indoor air quality, homes must achieve high levels of air tightness complemented by a mechanical ventilation system including heat recovery (MVHR). Specifically, “airtightness of a building must achieve an air change per hour rate of less than 0.6 at 50 Pa of pressure (n50), and have ventilation provided by either a balanced mechanical heat recovery ventilation or demand-controlled ventilation systems” (McCarron et al., 2019, p.297). This airtightness concept is revered for saving energy, avoiding structural damage, and contributing to thermal comfort (Bastian et al., 2022) while requiring no natural ventilation such as open windows. Mechanical HVAC units alter indoor air temperature, air movement, ventilation, noise levels, and humidity (Outcault et al., 2022). But despite known benefits to physical health and clean air, this may not lead to optimum user-comfort. This is because social housing residents have unique housing needs that differ from homeowners (Sunikka-Blank et al., 2018) and cannot be predicted without resident engagement, as residents are experts in the way they live and use their homes (Boess, 2022; Gianfrate et al., 2017; Walker et al., 2014).   Post Occupancy Evaluation after retrofit has found that social housing residents are often unfamiliar with mechanical systems and their sustainable benefits, especially when retrofit occurs without resident input (Garnier et al., 2020). This can lead to misuse, overheating, the prebound effect, and the rebound effect where affordable energy bills lead to excessive heating—at times 25-26°C (Zoonnekindt, 2019)—contributing to performance gaps as high as five times the predicted energy consumption (Traynor, 2019). Other households considered mechanical systems to be bulky, ugly, and noisy, prompting removal, lack of use, and at times emotional distress (Lowe et al., 2018). DREEAM’s Berlin pilot site found one household blocking mechanical ventilation with tissue paper because they considered the air too cold and residents “haven’t been informed about the positive impact of a well working ventilation on their health and on the energy efficiency of the heating in their apartment” (Zoonnekindt, 2019). DREEAM continued the project with Green Neighbours (Zoonnekindt, 2019), an innovative engagement program co-designed with and for residents to better inform mechanical systems usage. However, literature shows (Boess, 2022; Gianfrate et al., 2017; Walker et al., 2014) that informing residents on how to use mechanical systems is unlikely to change use-habits or adequately combat performance gaps. In order to change residents’ energy behaviours, resident stakeholders should be integrated in retrofit decision-making.

The in-depth study of energy poverty as a social phenomenon commenced in the late 19th century through the works of British social researchers Booth and Rowntree (O’Connor, 2016). This era was characterised by significant social and economic transformation, and these scholars were troubled by the living conditions and welfare of impoverished urban populations, who were residing in congested and unsanitary environments. Throughout the 20th century, poverty in policy contexts became quite narrowly defined as a lack of income. However, it was another social concern in the UK that led to the development of concepts like ‘fuel poverty’ or ‘energy poverty’ a century after Booth and Rowntree.[i] Following the 1973 oil crisis, the Child Poverty Action Group took the initiative to address how increasing energy costs were affecting low-income households in the UK (Johnson & Rowland, 1976). As essentials like heating, electricity, and fuels became necessary for maintaining a decent standard of living in modern British society, this advocacy group pushed for government financial support. Later, Bradshaw and Hutton (1983) introduced a narrower definition of energy poverty: “the inability to afford adequate heat in the home”. Since then, studies on energy poverty have typically excluded motor fuels, as they fall under transport poverty, a related but separate area of study (Mattioli et al., 2017). Energy poverty, as defined by Bouzarovski and Petrova (2015, p. 33), refers to "the inability to secure or afford sufficient domestic energy services that allow for participation in society." Although the precise boundaries of relevant domestic energy usage are still debated, this definition expands beyond mere heating as it encompasses energy used for cooling, which is particularly relevant in warmer climates (Thomson et al., 2019). Moreover, it enables a socially and culturally dependent understanding of what it means to participate in society (Middlemiss et al., 2019). On 13 September 2023, the European Union (2023) officially defined energy poverty as “a household’s lack of access to essential energy services, where such services provide basic levels and decent standards of living and health, including adequate heating, hot water, cooling, lighting, and energy to power appliances, in the relevant national context, existing national social policy and other relevant national policies, caused by a combination of factors, including at least non-affordability, insufficient disposable income, high energy expenditure and poor energy efficiency of homes”. The doctoral thesis and subsequent book by Brenda Boardman, Fuel Poverty: From Cold Homes to Affordable Warmth (1991), marked a significant breakthrough in energy poverty research. She emphasised the detrimental impact of energy-inefficient housing on health and quality of life. In the decades that followed, substantial literature confirmed her qualitative findings (Thomson et al., 2017). Notably, studies have demonstrated the adverse effects of living in energy poverty on physical health (Liddell & Morris, 2010), mental health (Liddell & Guiney, 2015), stress levels (Longhurst & Hargreaves, 2019), social isolation (Harrington et al., 2005), and absenteeism (Howden-Chapman et al., 2007). Boardman’s work introduced an indicator that has remained influential to this date, although it was not the first attempt to operationalise the concept of fuel poverty (Isherwood & Hancock, 1979). Her ‘2M’ indicator categorises a household as energy poor if it needs to allocate twice the median share of its budget for energy expenses to heat its home adequately. Boardman calculated this threshold to be 10% at that time. Due to its simplicity and ease of comprehension, many governments directly adopted this 10% threshold without considering specific contextual circumstances. Since the early nineties, numerous attempts have been made to develop alternative indicators. Highly influential ones include ‘Low Income High Cost’ (LIHC) by John Hills (2012), ‘Low Income Low Energy Efficiency’ (LILEE) that subsequently became the official British indicator (BEIS, 2022), and a 'hidden' energy poverty indicator by (Meyer et al., 2018). Critiques of these indicators focus, amongst other things, on their simplicity and perceived 'technocratic' approach (Croon et al., 2023; Middlemiss, 2017). This marked the beginning of significant government commitment, initially in the UK and later in other countries to address energy poverty. Although certain forms of cold weather payments had already been introduced by the UK's Conservative administrations, it was under the successive governments of Blair and Brown, following the publication of Boardman's work, that programmes such as the Winter Fuel Payment and Warm Home Discount were implemented (Koh et al., 2012). The UK examples highlight bipartisan support for addressing energy poverty, with both the Conservatives and Labour backing these efforts. This policy objective has also gained momentum in various legislative contexts, leading the EU to incorporate energy poverty alleviation as a fundamental pillar of the European Green Deal and a specific goal of its landmark Social Climate Fund (European Commission, 2021). Over the last three decades, public interest in energy poverty as a 'wicked' problem has surged, particularly during the recent energy crisis. This crisis began in 2021 when energy markets tightened due to a post-pandemic economic rebound, and it worsened dramatically after Russia's invasion of Ukraine in February 2022 (IEA, 2023). Extensive research on the impact of this price surge on energy poverty levels has been carried out throughout Europe and globally (Guan et al., 2023; Simshauser, 2023). Consequently, energy poverty has become a significant focal point in discussions related to the 'just transition,' especially within the realm of energy justice, as it serves as a valuable concept for targeting policies towards a specific vulnerable group in this context (Carrosio & De Vidovich, 2023).     [i] ‘Fuel poverty' and 'energy poverty' are used interchangeably, with the former being more common in the UK and the latter in mainland Europe (Bouzarovski & Petrova, 2015). Previously, scholars in the UK used 'energy poverty' to denote a lack of access to energy and 'fuel poverty' when affordability was the concern (Li et al., 2014). However, this distinction is no longer maintained.

A precise and definitive definition of environmentally sustainable social housing remains elusive. Instead, it encompasses a bundle of interrelated terms such as low-impact buildings, sustainable buildings and environmentally responsible buildings, all of which are interwoven with the characteristics of social housing and its policy and development. This review examines the theoretical underpinnings of social housing and environmental sustainability at the EU level, outlines the challenges of integrating sustainability into housing and proposes an overarching definition of environmentally sustainable social housing. Social housing narratives Elsinga (2012) explains that social housing in the European Union is broadly described as a set of initiatives to provide high-quality and affordable housing for disadvantaged and middle-income groups, usually managed by public authorities (Elsinga, 2012). In the UK and the Netherlands, however, the management of social housing has largely been entrusted to non-profit organisations. This approach contrasts with that of Germany and Spain, where public subsidies are provided to commercial landlords in exchange for a fixed social rent and thus constitute a form of social housing. Granath Hansson and Lundgren (2019) further note that the historical development of social housing in the EU has involved a significant transfer of responsibility from local authorities to non-municipal providers, albeit under highly regulated practices such as the UK's managerialist approach (Granath Hansson & Lundgren, 2019). Priemus (2013) offers a definition that emphasises the regulatory framework and the role of the public sector in regulating social housing (Priemus, 2013). This definition identifies the target group as households unable to compete in the private housing market due to financial, physical or mental health problems or belonging to an ethnic minority or immigrant group. Bengtsson (2017), adopting a target group perspective, characterises social housing as a "system" designed to provide housing to resource-constrained households, with the requirement for their needs to be confirmed (Bengtsson, 2017). Although there is no universally accepted definition of social housing, it can be assumed that social housing functions as a system that supports households with limited financial resources by providing long-term accommodation. This system requires a mechanism to assess the needs of the target groups, ensuring that the housing is provided as a subsidy and not as a self-sustaining unit. Consequently, rents or prices within this system must be affordable and below market prices. Environmental sustainability narratives While there is no definitive definition of environmental sustainability specific to the EU in the literature, several scholars have contributed to understanding this concept from a global perspective and thus influenced its interpretation at the EU level. Notable contributions include those by Hey (2005), Portney (2015), Purvis et al. (2019) and Morelli (2011). Purvis et al. (2019) emphasise that environmental sustainability results from describing environmental protection goals and their interrelationships with broader concepts of the built environment. Environmental sustainability has evolved into a dynamic and multidisciplinary concept that is closely linked to concepts such as resilience, durability and renewability. Morelli (2011) states that environmental sustainability can be applied at different levels and encompasses tangible and intangible aspects (Morelli, 2011). Portney (2015) argues that environmental sustainability goals include conserving natural resources, improving people’s well-being, and promoting industrial efficiency without compromising societal development. The contemporary approach to implementing sustainability focuses on reducing the resource consumption of buildings (such as water and energy) and minimising waste production while improving the quality of the built environment. This approach goes beyond individual buildings and extends to the urban fabric of cities (Berardi, 2012; McLennan, 2004). The EU's approach to environmental sustainability is reflected in its directives, policies, initiatives and guidelines. An example of these initiatives is the European Green Deal (EC, 2019), which aims for a carbon-neutrality across Europe by 2050 while promoting sustainable economic growth (Fetting, 2020; Siddi, 2020). In addition, the EU emphasises the importance of integrating environmental concerns into various policy areas, including energy, transport, agriculture and industry. The EU Circular Economy Action Plan, for example, promotes an economy that minimises waste and supports sustainable consumption and production patterns (EC, 2020). Overall, the EU's approach to environmental sustainability emphasises the need for a comprehensive, integrated, and long-term perspective (Hermoso et al., 2022; Johansson, 2021). This approach considers the economic, social, and environmental dimensions of sustainability and emphasises the importance of international cooperation in addressing global environmental challenges (Fetting, 2020; Hermoso et al., 2022; Siddi, 2020). Integration imperatives and its challenges The realisation of environmentally sustainable social housing presents numerous challenges. The initial investment in sustainable building technologies and materials is often considerable, especially given the limited funds available for social housing projects. Compliance with ever-evolving environmental regulations further complicates the delivery of sustainable social housing. Consequently, there is an urgent need to adapt sustainable practices to different scales of social housing projects, which requires careful planning and adaptation to the specific needs and context of different developments (Oyebanji, 2014). Despite these challenges, the field of sustainable social housing offers significant opportunities for innovation and improvement. Technological progress continuously offers more efficient, cost-effective and sustainable solutions (IEA, 2022). In addition, robust policy frameworks and incentives are crucial for the adoption of sustainable practices (Fetting, 2020). Another crucial element is the active participation of different stakeholders in the design and maintenance of housing, which can significantly improve both sustainability and social cohesion (Shirazi & Keivani, 2019). The way forward Environmentally Sustainable social housing is becoming increasingly important as it represents both a possible future and an ambitious goal. It envisions an environmentally responsible housing sector without compromising its development capacity (Morgan & Talbot, 2001; Oyebanji, 2014; Winston, 2021). It aims to create housing that minimises its environmental footprint, promotes the well-being of its residents and provides affordable housing opportunities. It also aims to meet the housing needs of vulnerable and low-income groups while promoting sustainable development and addressing climate and environmental issues (Udomiaye et al., 2018).

The concept ‘prebound effect’ refers to the phenomenon where actual energy consumption in buildings is significantly lower than the calculated energy consumption needed to maintain comfortable indoor temperatures (Sunikka-Blank & Galvin, 2012). This is typically observed in older, less energy-efficient homes, where occupants often under-heat their homes due to financial constraints, leading to lower actual energy usage than predicted by models (Galvin & Sunikka-Blank, 2016). This contrasts with the more commonly used term ‘rebound effect’, which occurs when energy consumption increases following efficiency improvements, offsetting some of the anticipated savings (Teli et al., 2015). The difference between the two is clearly visualised in Figure 1, developed by Sunikka-Blank and Galvin (2012). Energy savings discrepancies The prebound effect leads to significant discrepancies in energy savings estimates for retrofitting projects. Standard models often overestimate energy savings because they do not account for the lower baseline consumption caused by the prebound effect. This discrepancy is crucial because it implies that thermal retrofits may not yield the anticipated reductions in energy use and carbon emissions, which are often overstated in policy and financial analyses (Galvin, 2023). A detailed explanation of the performance gap is available in the vocabulary entry by Furman (2024). For instance, in Hungary, research shows that energy consumption predictions are often based on technical data alone, ignoring actual under-consumption behaviours, leading to overestimates in expected savings (Gróf et al., 2022). Similarly, in Italy, studies have highlighted that prebound effects cause a gap between theoretical energy models and actual energy usage, complicating the accurate forecasting of energy savings from retrofits (Giuliani et al., 2016). The study by Van den Brom et al. (2019) also supports this, showing that building characteristics and occupant behavior significantly influence energy consumption, with discrepancies between expected and actual savings due to prebound effects being notable in both the Netherlands and Denmark. Additionally, Gróf et al. (2022) emphasised that the prebound effect is influenced by the financial status of households, with households having limited financial means more likely to under-heat their homes, resulting in a greater prebound effect and further complicating the prediction of energy savings. Inherently linked to energy poverty Therefore, the prebound effect is closely linked to energy poverty, as it often reflects the behaviour of households that cannot afford to heat their homes adequately. Households experiencing fuel poverty are more likely to exhibit high prebound effects due to their efforts to save money on heating (Galvin & Sunikka-Blank, 2016). For instance, social housing tenants in the UK showed significant prebound effects, leading to under-heated homes and reduced energy consumption prior to retrofitting (Teli et al., 2015). Addressing the prebound effect involves recognising and mitigating the financial constraints that lead to under-consumption, thus improving both the accuracy of energy savings predictions and the living conditions of households experiencing energy poverty (Galvin, 2024a, 2024b). Moreover, hidden energy poverty is a critical aspect of this issue. Households often are not categorised as energy poor based on expenditure-based indicators because they do not dare to put their heating on due to financial constraints (Cong et al., 2022; Eisfeld & Seebauer, 2022). These households minimise their heating to the point where their energy expenditures are deceptively low, masking the severity of their situation. However, more recent indicators that focus on energy efficiency rather than high costs would identify them as energy poor (Betto et al., 2020). Addressing hidden energy poverty requires a shift in assessment criteria, also focusing on the energy efficiency of homes rather than just the high cost of energy bills. This approach ensures that households struggling with inadequate heating due to financial constraints are accurately identified and supported (Croon et al., 2023).

Energy communities are local collectives that organize the production, distribution, and consumption of energy. These communities aim to increase local energy self-sufficiency, reduce energy costs, and promote the use of renewable energy sources. They are usually founded by citizens, local authorities, or other entities and often involve collaborative management and shared ownership of energy resources. Legal context The European Commission’s Clean Energy Package establishes new legal frameworks that recognize the rights of citizens and communities to participate directly in the energy sector. It defines energy communities under two directives: the Renewable Energy Directive (EU) 2018/2001 for ‘renewable energy communities,’ which focuses on renewable energy, and the Internal Electricity Market Directive (EU) 2019/944 for ‘citizen energy communities,’ which includes all types of electricity. These directives outline energy communities as collective citizen actions within the energy system. Energy communities are characterized as non-commercial market entities that pursue environmental and social objectives. The directives ensure that energy communities can compete fairly in the market without distorting competition or neglecting the rights and obligations that apply to other market participants. Structure and organization Energy communities can take on different legal and organizational forms, including cooperatives, non-profits, limited liability companies, or informal associations. The choice of structure often depends on the local regulatory environment, the specific goals of the community, and the preferences of its members. Key features of energy communities include democratic decision-making processes, shared ownership of energy assets, and a focus on local benefits. Members of an energy community typically have a say in major decisions, such as the type of renewable energy technology to adopt, how to finance projects, and how to distribute benefits (Koirala et al., 2016; Walker & Devine-Wright, 2008). Goals and Objectives The primary goals of energy communities are to promote renewable energy production, enhance energy efficiency, and increase local energy resilience. By generating energy locally from renewable sources such as solar, wind, or biomass, these communities aim to reduce their dependence on fossil fuels and lower their carbon footprint. Energy efficiency measures, such as retrofitting buildings or promoting energy-saving behaviors, help to reduce overall energy consumption. Additionally, by decentralizing energy production and creating local energy networks, energy communities can enhance energy security and resilience against external shocks, such as power outages or price volatility in energy markets (European Commission, 2020; Hicks & Ison, 2018). Benefits Energy communities offer a multifaceted array of benefits. Economically, they empower communities by locally generating and managing energy, thereby lowering energy costs and generating additional income through surplus energy sales. Moreover, they stimulate job growth in the renewable energy sector, from installation to management roles. Environmentally, energy communities champion sustainability by promoting renewable energy sources and reducing greenhouse gas emissions through energy efficiency measures (REN21, 2019; Bauwens et al., 2016). Socially, they serve as catalysts for community cohesion, fostering collaboration, knowledge-sharing, and support among members. Lastly, they bolster energy security and resilience by decentralizing energy production, minimizing reliance on centralized systems, and implementing local energy storage solutions and microgrids to mitigate supply disruptions (Hicks & Ison, 2018; Koirala et al., 2016). These interconnected benefits underscore the vital role energy communities play in fostering sustainable, resilient, and empowered communities. Challenges Energy communities, while offering numerous benefits, face a variety of obstacles that hinder their advancement and sustainability. Significant regulatory barriers exist, particularly in regions where current energy regulations may not support the decentralized energy generation and communal ownership principles of these communities. This situation requires careful negotiation of regulatory frameworks and the acquisition of permits (European Commission, 2020; Hicks & Ison, 2018). Financial limitations present another formidable barrier, as financing renewable energy endeavors and energy efficiency initiatives demands substantial initial investment, often requiring a blend of funding sources such as member contributions, grants, loans, and subsidies, which can be particularly daunting for smaller communities with limited financial means (Bauwens et al., 2016; Walker et al., 2010). Possessing technical expertise is crucial for deploying and overseeing renewable energy systems. This underscores the need for investments in training and capacity-building initiatives to empower community members with the necessary skills and knowledge. Furthermore, fostering robust community engagement emerges as a critical challenge, demanding concerted efforts to ensure all members are adequately informed, engaged, and motivated to partake in communal endeavors, underpinned by transparent decision-making processes, effective communication, and the cultivation of a sense of ownership and shared responsibility (Walker & Devine-Wright, 2008; Seyfang et al., 2013). Future Implications The concept of energy communities aligns with broader trends in the energy sector, including the decentralization of energy production, the transition to renewable energy sources, and the increasing importance of community participation in energy systems. As technology advances and regulatory frameworks evolve, energy communities are likely to play an increasingly significant role in the energy transition (European Commission, 2020; Koirala et al., 2016). The Citizen participation and community co-ownership in energy projects play a vital role by increasing public involvement in energy issues and acceptance of renewable energy. These energy communities prioritize local benefits over profits, generating financial gains, local investments, and social advantages. They enhance democratic decision-making and control over renewable energy, although there is a risk of creating social disparities between wealthier members and those less affluent. Energy communities provide opportunities for lower-income individuals to engage in electricity markets and can help alleviate energy poverty through initiatives that lower energy bills and improve social conditions. A comprehensive EU-wide study would help assess their potential in reducing energy poverty and their impact on sustainable energy behaviors. Energy communities support renewable energy adoption, offer flexibility services, and improve network operations. By 2030, they could own significant shares of renewable energy capacity in Europe. They introduce new business models in the power sector and provide local flexibility services, but their integration must ensure cost-efficiency for all customers. Further research and innovation in energy communities can enhance citizen engagement and technological adoption. More studies are needed to quantify their benefits and support their development. Final remarks Energy communities represent a powerful model for local, sustainable, and inclusive energy systems. By empowering citizens to take control of their energy production and consumption, these communities can drive the transition to renewable energy, enhance local energy security, and deliver a wide range of economic, environmental, and social benefits. Despite the challenges, the growing interest in and support for energy communities suggest that they will continue to play a crucial role in shaping the future of energy systems worldwide.