A System Dynamics Model for De-risking Energy Efficiency Investments in India's Built Environment

This study develops a System Dynamics model to identify the most effective integrated mechanisms for de-risking energy efficiency (EE) investments in India’s built environment. Despite proven technologies and supportive policies, EE financing remains constrained by high perceived risks and fragmented interventions. The research employs a five-phase System Dynamics methodology spanning problem definition, causal mapping, quantitative simulation, scenario testing, and stakeholder validation to capture the dynamic interactions among financial, technical, and behavioral drivers.Results reveal that standalone interventions such as partial risk guarantees, standardized measurement and verification (M&V) protocols, or project aggregation platforms yield only incremental improvements (29–71% increase in cumulative private investment by 2035). In contrast, a strategically sequenced, integrated policy package combining these instruments with demand-side activation measures such as awareness campaigns and green lease frameworks creates powerful synergies, driving a projected 378% increase in private investment by 2035. The model highlights that addressing demand-side barriers, particularly split incentives, and building market infrastructure for trust and scale are high-leverage strategies for sustained transformation.The study concludes that India’s EE financing challenge is a systemic problem requiring systemic solutions. An integrated, phased policy package that simultaneously mitigates supply- and demand-side risks can transition the market from a high-risk, low-investment equilibrium to a self-reinforcing cycle of confidence, affordability, and scaled private capital deployment.