Current market development of energy performance contracting: A comparative study between Hong Kong and Taiwan

Pan Lee (Department of Building & Real Estate, The Hong Kong Polytechnic University, Hong Kong, SAR)
Tsun Ip Lam (Department of Building & Real Estate, The Hong Kong Polytechnic University, Hong Kong, SAR)
Ren Jye Dzeng (Department of Civil Engineering, National Chiao-Tung University, Hsin Chu, Taiwan)

Journal of Property Investment & Finance

ISSN: 1463-578X

Publication date: 1 July 2014

Abstract

Purpose

The purpose of this paper is to investigate the current market development of Energy Performance Contracting (EnPC) in Hong Kong and Taiwan, focussing on four key aspects: first, the potential building energy retrofits as an investment for future savings; second, the motivations for building owners toward the use of EnPC; third, the reasons for building owners not using EnPC; and fourth, the different approaches of Hong Kong and Taiwanese governments toward the promotion of EnPC.

Design/methodology/approach

A dual-questionnaire survey was conducted both in Hong Kong and Taiwan, where the same set of questionnaire was sent to the key personnel of the energy services companies (ESCOs) in both regions as identified from the latest member lists of representative trade associations, supplement with 11 structured interviews.

Findings

Apart from explainable differences, the results show the top rankings by the respondents of Hong Kong and Taiwan as follows: “Potential retrofit works” including lighting replacement with efficient fluorescent and light emitting diode lamps and improvement of air-con system. “EnPC Motivations” including owners’ lack of upfront capital and use of energy savings for other purposes may yield better returns; ESCOs’ provision of turnkey services. “Reasons not considering EnPC” including worry about its complexities; lack of familiarity with EnPC and long payback periods. As for promotional efforts for EnPC, the Taiwan government has taken more initiatives to foster its use both technically and financially.

Practical implications

This study identifies market-related motivators and deterrents as experienced by ESCOs in implementing EnPC projects in two developed Asian economies.

Originality/value

This study provides insightful information for the stakeholders about the latest market development of EnPC in Hong Kong and Taiwan.

Keywords

Acknowledgements

The work described in this paper was supported by a grant from the General Research Fund of the Hong Kong SAR Government (Project No.PolyU5188/11E) and the 2013 NCTU Taiwan Elite Internship Program awarded by the National Chiao Tung University to Pan Lee for a study visit to Taiwan.

Citation

Lee, P., Ip Lam, T. and Jye Dzeng, R. (2014), "Current market development of energy performance contracting: A comparative study between Hong Kong and Taiwan", Journal of Property Investment & Finance, Vol. 32 No. 4, pp. 371-395. https://doi.org/10.1108/JPIF-01-2014-0003

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Publisher

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Emerald Group Publishing Limited

Copyright © 2014, Emerald Group Publishing Limited

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