Key stakeholders and program participants are fundamental components of the development and implementation of any successful energy efficiency policy or program.

Goal-setting and planning activities should include key stakeholders from the sector that is being targeted. For example, when setting energy savings goals for the residential building sector, USAID mission staff should engage international financing institutions (IFIs), utilities, NGOs, local retailers, installation contractors and others. This type of collaborative goal-setting will increase buy-in from key stakeholders, help set realistic energy savings targets and create a roadmap for success with which all parties will be comfortable. Key stakeholders and their traditional roles in energy efficiency programs are described below. This list is illustrative, including many of the stakeholders that typically administer and participate in energy efficiency programs.

Governments

Governments often lead the charge in addressing energy efficiency by adopting policies that set high-level goals for energy savings and GHG emission reductions or specific standards for buildings and technologies. Typical government partners may include energy ministries, regulators and units that oversee private investment. Codes for buildings and testing and labeling standards for products and equipment are effective tools in advancing efficiency in the market. Governments can also reform power sector regulatory policies to enable utilities to run customer energy efficiency programs. Financial incentives, including tax credits and value added tax (VAT) exemptions for energy-efficient products, are additional tools used by governments to promote efficiency in the marketplace.

Regulators, in particular, often play an important role in promoting energy efficiency. On the financing side, some regulators have the authority to set rates that are structured to compensate utilities for the capital expenditure incurred in implementing energy efficiency programs. Furthermore, regulators can adopt various rate designs and structures—such as time of use rates—to promote energy efficiency among consumers by incentivizing certain behaviors or further adoption of energy efficiency measures at the household level.

Consumers

Consumers, whether individuals, businesses or local governments, need to understand the benefits of efficiency, buy-in to program goals, and have input on effective program design features. This group of stakeholders best understands the barriers and challenges, whether informational or technical, that stand between them and energy efficiency choices.

Financial Institutions

International Financing Institutions (IFIs) often share USAID’s goal of promoting energy efficiency and reducing greenhouse gas emissions, and they have the ability to provide financing for projects and programs which complement USAID work on enabling policy frameworks, program design, and/or project preparation. Traditional financial institutions are also mobilizing to unlock funding for energy efficiency projects via initiatives such as the United National Environment Programme Finance Initiative (UNEP FI) and groups such as the SE4ALL Energy Efficiency Finance Accelerator.

Other types of financial institutions can include energy service companies (ESCOs), which can provide financing for energy efficiency projects upfront and will be repaid over time with the savings. ESCOs are a growing industry across developing economies and provide expertise in estimating and implementing energy cost savings measures.

Utilities

Utilities, including electric, gas, district heat, and water, can play a major role in the administration and implementation of energy efficiency programs. Energy efficiency programs reduce peak energy demand, which can benefit utilities that have insufficient generation capacity. In some cases, political pressure prevents utilities from assessing cost-reflective tariffs to recover their costs. In these cases, utilities benefit from promoting energy efficiency by reducing losses. Energy efficiency can also help reduce load shedding, improve grid reliability and help utilities avoid costly capital expenditures on new power plants.

Contractors

Contractors are the skilled labor and technical professionals needed to install energy-efficient products, follow efficient building practices and integrate energy efficiency into existing processes and systems. For voluntary market-based programs, contractors must also be able to effectively sell and communicate the benefits of energy efficiency to consumers in order to guarantee their participation in programs.

Manufacturers and Retailers

Manufacturers and retailers have direct influence on the availability of energy-efficient products in the market. Both regulatory policy and voluntary programs can influence manufacturer and retailer decisions to improve the energy efficiency of the products they make or sell. While not all developing countries will have a robust manufacturing or retail sector, the ability to provide energy-efficient products and equipment to energy users is crucial for program success.

Non-Governmental Organizations (NGOs)

NGOs who have close ties to local communities can help educate consumers about energy efficiency and recruit local participants. NGOs can also help gain support for efficiency initiatives among policymakers. It is important to ensure that the goals of an energy efficiency program align to some degree with the NGO’s mission to avoid potential conflicts of interest.