Financing Solar Energy Systems with Energy Savings Performance Contracts in the Federal Sector: Results of a Survey on Barriers, May 1998-January 1999

This report summarizes the findings of an investigation into financing solar energy systems for the Federal sector. The objectives of the investigation were (1) to identify the barriers that impede companies from using Energy Savings Performance Contracts (ESPCs) to develop solar energy projects for Federal facilities, and (2) to clarify the impacts of Federal contracting requirements on theenergy service companies' use of ESPCs. Twenty-four representatives of energy service companies agreed to be interviewed. Their responses indicate that these are the primary barriers to greater use of ESPCs: the relatively long payback periods for investments in solar technologies; the length of the ESPC process; the cost of certain contractual requirements regarding wasges and financing; and alack of knowledge about the actual cost and reliability of solar systems. The report proposes a number of actions the government could take to remove these barriers, including (1)streamlining and shortening the ESPC process and (2) doing more to inform both government agencies and energy service companies about the costs and benefits of solar systems.