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Public Procurement of Energy Efficient Products | Lessons from Around the World

 

The public sector represents a strategically important market for energy efficient goods and services. As a big and visible consumer, actions taken by a government to improve their energy efficiency (EE) can strongly influence its citizens.

 

This report assesses global experiences with energy efficient purchasing (EEP) as a tool to help governments improve the efficiency of their facilities and public services. Many government jurisdictions—countries, states/provinces, and local governments—are adopting policies that require or encourage the procurement of energy efficient products by public agencies. Despite these initiatives, prevailing challenges exist including:

 

  • A lack of incentives due to budgetary restrictions, split incentives and other factors; 
  • Limited financial resourcesneeded to pay for the higher upfront cost of more energy efficient equipment or to finance purchases to amortize these costs; 
  • Restrictive policies and procedures, which make procurement, budgeting, and new approaches more difficult; 
  • Behavioral inertiaof a risk-adverse public sector used to the status quo; 
  • No or poor access to information and institutional knowledgeabout EE opportunities, implementation options, certified energy efficient equipment, lifecycle costing; and 
  • Weak governance, which can introduce new challenges when governments pay a premium for energy efficient products.

 

Key observations of global EE programs from a review of 10 case studies and interviews with experts revealed—amongst other observations—that EEP remains a popular policy instrument being implemented or considered in many, mostly developed and middle-income, countries. 

 

The study concluded that EEP policies and programs can be an effective way to promote energy efficient products by leveraging a government’s purchasing power and influence.

 

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