Houses of pain: Paying the energy poverty premium for energy inefficiency and inequity in Hungary

This article utilizes the energy affordability ratio and the energy equity threshold to quantify the energy poverty premium in the Hungarian household sector. The focus on equity meets a call to tailor policy solutions to individual needs, in a similar manner to other sectors, such as health, education, and the environment. The novel arrangement of these quantitative methods enables the identification of households that do and do not pay an equitable amount for energy services. The calculations are based on required energy expenditures according to the energy rating of the buildings, instead of the actual energy expenditures. It can be stated that despite regulated and highly subsidized energy prices in Hungary, which are applied uniformly across all households, they generate unequal financial burdens due to the poor energy efficiency of the building stock and low disposable income. There is persistent and onerous energy inequity for almost all Hungarian households. While the median energy affordability ratio is 4.33%, the ratio varies widely across households, with a maximum of 107.27%. The energy equity threshold is 270 kWh/m 2 a, above which energy poverty is significantly present. Five particularly vulnerable social groups were identified in our study: 1) single person households with at least one dependent child, 2) other single person, 3) pensioner, 4) unemployed, and 5) other economically inactive households. We can conclude that assessing differences in energy affordability across population groups in Hungary requires a new set of indicators. The Hungarian utility cost reduction program needs immediate reforms including more bands for the block pricing system, introduction of a social energy tariff, time of use pilot projects, and greater investment into energy efficiency.