Abstract
The barriers to energy savings in institutions and private homes are well known and include people’s lack of interest, awareness, knowledge and human and financial capacity. Experiences made in several countries show that EPC—energy performance contracting—may be used for overcoming many of these barriers. A typical EPC project is delivered by an energy service company (ESCO) and the contract is accompanied with a guarantee for energy savings. EPC is increasingly taken in use in the professional market (firms and the public sector), but is less common in the residential sector market. It has been suggested that there are several barriers for using EPC in the domestic sector such as the uncertainty involved in estimating forthcoming reductions in private consumption. In this paper, we present the results from a pilot project on the use of EPC in a housing cooperative in Oslo. The project was initiated and observed by the researchers. The research followed a transdisciplinary methodology in that it was conducted by both researcher and practitioner (co-authors) in close collaboration with members of the housing cooperative and the ESCOs, who also contributed to the interpretation of results. We document the process in terms of why the Board decided to join the EPC pilot, the call for offers from ESCOs who guaranteed that purchased annual energy would be reduced by one third, the responses to and negotiations of the offer from the ESCO who became contracted in the initial phase and up to the moment when the General Assembly finally decided to not invest in the proposed energy saving measures. We find that the residents not only had limited interest in energy savings but also lacked confidence in the EPC process. This contributed to the outcome. We discuss the findings in relation to the barriers to using EPC among housing cooperatives. We highlight the need for more knowledge about the client side for understanding how barriers may be overcome. Three specific recommendations for how EPC may successfully be employed among housing cooperatives are suggested as follows: (i) include refurbishment and not only energy savings in the EPC, (ii) identify the residents’ needs in an early phase and (iii) communicate the EPC principle to the residents throughout the process.
Highlights
Performance contracting is said to have its roots in France in 1937 when a heating system in a hospital in Villiers-Saint-Denis suddenly broke down (Andersson et al 2011:17)
The contract for phase 1 did not specify that the energy service company (ESCO)’s extra resource use would be compensated, and this was based on experiences with energy performance contracting (EPC) in the municipal sector where relatively few individuals are involved in the process of elaborating the details and where the final decisions are made by politicians who consider the needs of the public and not private homes
The experiences from this pilot project in which energy performance contracting (EPC) was attempted to be employed in a Norwegian housing cooperative confirm some of the observed challenges to achieving energy savings in the residential sector in general and the barriers to EPC in particular
Summary
Performance contracting is said to have its roots in France in 1937 when a heating system in a hospital in Villiers-Saint-Denis suddenly broke down (Andersson et al 2011:17). The Dutch company Royal Dutch Shell soon exported the concept to the UK and the USA where contracts for shared benefits between contractor and customer were further developed (ibid.) It would take another 50–60 years before energy performance contracting (EPC) became common in the form we know today: a market mechanism in which an energy service company (ESCO) provides a customer with a financially binding guarantee of the energy savings that will be achieved. Reflecting the increasing faith in EPC in the European Union, member states have since 2003 been required to implement performance-based energy regulations (European Commission, 2003 MB, found in Guerra-Santin and Itard 2012), and a Code of Conduct was launched in 2015.1 In Norway, the EPC market has been denoted as ‘preliminary’ (Bertoldi et al 2014:253) and ‘intermediary’ (EU/IEE 2013:8), but recently, more than 50 Norwegian municipalities have committed themselves to EPC projects On average, these projects have the goal of saving approximately 30 % of overall energy use (Aasen et al 2016). There are two main schemes for EPC, one involving ‘shared savings’, which implies that the performance
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