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Challenges to Agricultural Energy Project Implementation

Published by the American Society of Agricultural and Biological Engineers, St. Joseph, Michigan www.asabe.org

Citation:  2012 Dallas, Texas, July 29 - August 1, 2012  121406116.(doi:10.13031/2013.42222)
Authors:   Robert Scott Frazier
Keywords:   Rural Energy, Energy Audit, Recommendations, Project Implementation, Psychology, Decision Science, Cognitive Bias, Loss Aversion, Economic Metrics

What, on the surface, appears to be a perfectly logical endeavor implement beneficial energy management or energy efficiency projects often never makes it past the identification stage. An estimate of actual implementation of recommended energy projects under the US Department of Energys Industrial Technologies Program (ITP) based on Energy Savings Assessments/audit recommendations is as low as 20% (Martin et al., 2011). Implementation of energy recommendations in rural settings using USDA Rural Education Achievement Program (REAP) grants has an estimate of about the same implementation rate (23%) and a much lower rate for renewable energy systems (DWEA, 2009). For professionals in the field of energy management and auditing, this is a well known, and often frustrating, phenomenon. In some cases customers will refuse to do low (or no) effort activities that would result in immediate savings or refunds. Are these customers behaving in ways contrary to rational economic behavior? What are some of the perceived implementation issues that would keep customers from implementing energy and cost savings measures? Is the customers risk aversion to implementation logical or simply guessing? How can energy professionals work to improve implementation rates? Does the customer know something that the energy professionals do not? The following is not a comprehensive description of energy project implementation problems and causes but rather an introduction to this sometimes frustrating behavior pattern and some possible solutions.

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