Analysis of shared savings vs. direct financing of energy retrofits in federal buildings. Final report
This study examines the merits of using shared savings contracts with the private sector to foster energy conservation retrofits in federally-owned buildings. Shared savings is a generic term used to refer to a contractual arrangement between a building owner and a private organization which specializes in energy retrofits. For the purposes of this analysis, the Federal Government and a shared savings company enter into an agreement wherein the company makes capital improvements and/or operating changes to improve the energy efficiency of a federally owned facility at no out-of-pocket cost to the government. The resulting savings in reduced (or less rapidly increasing) energy bills are shared by the two parties according to a predetermined formula for a finite period of time. This study sought to evaluate from the Federal Government's perspective the desirability of shared savings as compared with direct federal financing, under which the Federal Government uses conventional financing methods to undertake the same retrofits. Both options were compared with the status quo, in which retrofits are financed and performed by individual agencies, but where financial resources are lacking to undertake a comprehensive retrofit program on the scale made possible by shared savings. Using a simple cash flow model, shared savings and direct federal financing approaches were each applied to the retrofit of three hypothetical federally owned structures: a hospital, commissary, and a large office building. Federal Government (or agency) cash in-flows and out-flows were calculated for each scenario, and the net cost or savings to the Federal Government estimated. In addition to the quantitative analysis, interviews with members of the energy retrofit contracting industry and government officials were conducted.
- Research Organization:
- DHR, Inc., McLean, VA (USA)
- DOE Contract Number:
- AC01-81CS10097
- OSTI ID:
- 6835048
- Report Number(s):
- DOE/CS/10097-1; ON: DE84012225
- Resource Relation:
- Other Information: Portions are illegible in microfiche products. Original copy available until stock is exhausted
- Country of Publication:
- United States
- Language:
- English
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Related Subjects
ENERGY CONSERVATION
FINANCING
PUBLIC BUILDINGS
FINANCIAL ASSISTANCE
NATIONAL GOVERNMENT
RETROFITTING
BUILDINGS
FINANCIAL INCENTIVES
320103* - Energy Conservation
Consumption
& Utilization- School
Municipal
& Other Public Buildings- (-1987)