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Government Purchase Programs

The government market presents a substantial opportunity for energy savings. Besides America's 50 state governments, there are 3,043 county, 19,279 city, and 16,656 town governments. Their total annual energy-related expenditures include $12 billion in energy bills and another $50-$70 billion for energy-related products. In addition, there are countless school, hospital, and special purpose districts. All of them purchase energy-consuming supplies.

Government procurement programs can mandate the purchase of energy-efficient or environmentally friendly products, including alternative fuels. Many state and local agencies have implemented government purchase programs based on the ENERGY STAR® and Federal Energy Management Program.

Government purchase programs allow government and special purpose agencies to lead by example. In addition to promoting the use of renewable energy and energy-efficient products, these products reduce energy costs without compromising quality. Successful energy management programs adopt a procurement policy as a key element of the overall strategy.

Importantly, orchestrated government purchase programs in which one governmental entity coordinates and aggregates the purchases for others can reap significant cost savings resulting from bulk purchases. Some state agencies act as the procurement arm for other units of government and special purpose districts within the state. If energy-efficient products are on the approved list, the resulting cost and energy savings can be enormous.

Instituting an effective policy can be as easy as asking procurement officials to specify ENERGY STAR-qualified products, such as office equipment, in their contracts or purchase orders. The policy may also require that purchase decisions be based on life-cycle cost analysis.

Arguments for Government Purchase Programs

  • These programs encourage the use of renewable energy equipment and energy efficiency measures in the taxpayer-supported government market.

  • These programs require the consideration of cost-effectiveness over the life cycle of energy-consuming products and equipment.

  • Government purchase of renewable energy may increase market demand for alternative energy sources.

  • Government agencies may lead by example.

Arguments against Government Purchase Programs

  • Poorly designed programs may not substantially increase the use of renewable energy.

  • The initial cost of energy-efficient equipment or products may be higher than for standard equipment. Many government purchasing agents are required to obtain the lowest-cost product.

  • Government budgeting practices and processes do not adequately account for life-cycle costs.

For more information on government purchase programs and products: