Lawrence Berkeley National Laboratory

For the past three decades, China has experienced unparalleled economic growth to become the second largest economy in the world, and also the largest carbon dioxide (CO2) emitter (Mo, 2016). Building operation accounts for 19.5% of China’s total energy consumption, and commercial buildings consumed 211 metric tons carbon equivalent (Mtce) in 2013, accounting for 27.9% of total building operation energy usage (THUBERC, 2015). With increasing urbanization and building stocks, energy retrofitting for commercial buildings1 is becoming an important strategy that China can use to reach its carbon emissions reduction target. Favorable government policies have greatly advanced building energy efficiency efforts, for both government-owned public buildings and privately owned commercial buildings. Building energy efficiency policy goals were set up in the Eleventh Five-Year Plan (FYP) (2006– 2010) and Twelfth FYP (2011–2015); those goals are achieved by government programs such as the Top Runner program, and by monetary incentives like grants and subsidies (Yu, Evans, & Shi, 2014; NDRC, 2015; State Council, 2017). A self-sustaining and mature building energy efficiency retrofit market mechanism is, however, yet to be established. Going forward into the Thirteenth FYP (2016–2020), China’s commercial building energy efficiency industry will transition from government subsidy-driven to market-driven with legislative support (State Council, 2017). The Chinese government’s advocacy of the green finance system has provided new opportunities for the building energy efficiency market to go through this transition (IPECC, 2016). However, significant barriers still remain if the building energy efficiency market wants to become self-sustaining and prosper; this requires a set of supportive government policies that set up a healthy market ecosystem. This study examines existing energy efficiency upgrade barriers for commercial buildings, and then presents a series of stakeholder interviews with energy service companies (ESCOs), commercial banks, hosts, property management companies, measurement and verification companies, and government. Interviewees range from high level executive teams and middle managers to ground-level staff, depending on staff availability and accessibility.