Historically, Federal appropriations have provided the bulk of financing for Federal facility energy efficiency projects. Direct appropriations allow the Federal government to retain all of the savings from cost-effective renovations and to avoid incurring interest charges. Because the government's appropriated funds comefrom tax revenues or bonds, the "cost" to appropriate these funds is lower than the cost to borrow money from a bank or financial institution. This approach also enables the agency to implement an energy efficiency project with minimal contractual obligations.
With the current emphasis on reducing the Federal government's appropriations, energy- and facility-related projects not directly related to an agency's mission may not be fully funded or may be delayed. However, as the government moves toward operating more like a business, reducing the cost of operations by introducing energy efficiency and water conservation measures and renewable energy technologies will become more important.
To meet the growing need to save energy and dollars during financially tight times, Federal agencies will need to consider alternative forms of financing.