Energy efficiency policies and programs can help address a number of energy issues that have a direct impact on development.

Creating the most effective combination of energy efficiency policies and programs involves a multi-step process focused on country-specific opportunities and resources:

Step 1: Identify Goals and Opportunities

First, identify how development priorities in a given country relate to energy. A description of energy-related issues is featured on the Energy Efficiency Basics page. Issues include energy security and access, affordability and reliability, sustainability, low-emission development, gender equality and health. While not an exhaustive list, these are common development issues for which energy efficiency can help provide solutions. More information on how energy efficiency supports a variety of USAID development objectives can be found in the section on Integrating Energy Efficiency into Country Development Cooperation Strategies.

After identifying the issue(s) you would like to focus on through energy efficiency, the next step is to explore potential local participants and stakeholders. USAID mission staff can play an active role in goal-setting and visioning activities and should include key stakeholders from the sector they are trying to influence. This type of collaborative goal setting will increase buy-in, help set realistic energy savings targets and create a road map for success with which all parties will be comfortable.

Step 2: Identify Policy and Program Approaches

There are a variety of approaches to implementing energy efficiency policies and programs that target different sectors of a country’s economy. Certain approaches are better suited for a particular energy sector while others can be applied across multiple sectors. A given approach should take into account any potential barriers to implementation, such as landlord-tenant disincentives, limitations in awareness and information, and capital constraints. In addition, decisionmakers should conduct a quantitative baseline analysis of energy consumption and evaluate the technical potential for energy savings associated with each intervention as well as their upfront and lifetime costs.

The USAID Energy Efficiency Opportunity Study Tool seeks to simplify the decision-making process by allowing policymakers to input country-specific information (i.e. existing barriers to regulation, financing, research and development) and review viable implementation measures ranked by cost-effectiveness. The tool compares projected costs of conserved energy (CCE), or the levelized cost of energy, to highlight appropriate cost-effective energy efficiency measures while also visually displaying a comparison of implementation measures.

After conducting an analysis of appropriate measures, select specific implementation approaches that apply to different energy sectors and combine them into an energy efficiency program portfolio. Consider focusing on sectors and implementation approaches with the greatest opportunity for energy savings given the country’s development context. Energy efficiency programs most often focus specifically on the residential, commercial, industrial, transportation and agriculture sectors.

For example, if a country’s energy use breakdown suggests 45 percent of all energy consumption can be attributed to the industrial sector, and within this segment, 75 percent of all consumption can be attributed to four distinct industries, energy audits of a few representative manufacturing facilities from each industry can be used to establish a baseline consumption scenario. From there, analysts can quantify the technical savings potential for each source of energy consumption, ideally across a spectrum of potential interventions, as well as identify any barriers to implementation. Finally, the study should be scaled up across industries to estimate country-level savings potential.

Learn more about policy and program approaches.

Step 3: Define Financing Strategies

Financing for energy efficiency can come from a variety of sources. The most effective strategy depends on the type of program, such as lighting or smart meters. It also depends on the sector—financing opportunities will be different for consumers making choices about products in their home than for major hotel chains. The maturity of the market (i.e. the level of acceptance of energy efficiency among consumers) will also be a major factor.

Learn more about financing strategies.

Step 4: Establish Processes for Monitoring and Evaluation

Establish processes through which policies and programs will be evaluated, monitored and verified to make sure that they are meeting their stated goals. The review and confirmation of the success of energy efficiency programs is a critical step towards achieving long-term energy savings. Monitoring and evaluation should be included in the scope of work when designing an energy efficiency project. Ideally, steps for completing the evaluation are first discussed when determining individual implementation approaches. While there are several mechanisms that can be put into place at the outset to make evaluation more successful, a simple approach is to subdivide the evaluation into goals and metrics.

Learn more about monitoring and evaluation.