Implementation and Impacts of Intergovernmental Grant Programs on Energy Efficiency in the USA

Abstract

We review recent studies on intergovernmental grants for energy efficiency in the 2009 American Recovery and Reinvestment Act (ARRA)’s clean energy package, which has been the biggest federal investment in the energy sector over the past few decades. Our review provides a holistic picture of the implementation process of ARRA’s energy intergovernmental grants and their impacts on energy efficiency. State and local governments experienced challenges on implementing their grant programs efficiently. The implementation delay was affected by recipient administrative capacity, political support, use of contractors, and red tape in grant compliance. Existing evaluation studies are mostly conducted for two programs that subsidize the weatherization of low-income homes and the purchase of Energy Star appliances. The impacts of these programs on energy efficiency adoption and energy savings vary across jurisdictions. However, low participation and marginal energy savings are reported as common issues, which might be related to program designs and implementation. There has been a lack of integration between implementation studies and grant program evaluation. To better inform energy efficiency intergovernmental grant design, further research is needed to understand the link between program design, implementation, and program effectiveness. In addition, rigorous evaluation regarding other outcome metrics, such as energy efficiency, technology innovation, and green jobs, are desirable.