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Open Access Publications from the University of California

The Chilling Effects of Administrative Burden on Efficiency Policy Uptake: Examining the Case of Federal ESAs

Creative Commons 'BY' version 4.0 license

Utilizing policies and programs which incentivize energy efficiency or on-site renewables is difficult. The challenges and costs associated with researching these policies, interacting with their providers, and ensuring regulatory compliance can be collectively referred to as administrative burden. To better understand the impact of administrative burden on energy efficiency policies, we investigated the administrative burden associated with energy sales arrangements (ESA). ESAs are a contracting vehicle related to energy savings performance contracts where an energy services company designs and constructs a renewable energy system at a federal site, transferring ownership of those generating assets to the site after a 20-year term. We conducted a series of in-depth interviews with a variety of relevant ESA stakeholders, including federal project managers, subject matter experts, and energy service companies. We then augmented these interviews with a review of the relevant literature. This research indicated that the current level of administrative burden decreases the adoption of renewable energy through ESAs by the federal government by raising upfront costs, depressing project attempts due to complexity, and introducing delays and challenges in successfully implemented projects. This chilling effect is especially pronounced in new policy vehicles and with inexperienced implementers. Findings from the specific case of ESAs can be generalized to other types of energy policy including efficiency programs. Policy makers decrease the efficacy of initiatives through increased administrative burden, and these effects will be most pronounced in programs with novel design or targeted at unfamiliar audiences.

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