BRITISH UNIVERSITY RESEARCH REVEALS HOW ONBILL FINANCING PROGRAM SUPPORTS ENERGY EFFICIENCY IN DUBAI

Prof. Bassam Abu-Hijleh

Dean of Engineering & IT

British University in Dubai

As more governments globally adopt energy efficiency as a mitigation measure, researchers at the British University in Dubai UAE, Engr. Hasan Zulfiquar Kamal (Ph.D. student) and Prof. Bassam Abu-Hijleh (Dean) at the Department of the Sustainable Built Environment conducted a feasibility analysis of the OnBill Financing Program (OBF).

The OBF scheme is used in several countries around the world. OBF has been specifically designed to promote the implementation of energy efficiency in buildings by balancing the risk-reward aspects between the building owners and tenants.

Speaking to Innovation@UAE magazine, Prof. Abu-Hijleh explains, “Sustainability is a holistic concept. All relevant stakeholders must work together in order to achieve it. This means that both businesses and individuals need to be included in all strategies and activities related to sustainability, including energy efficiency & savings.”

As per the paper, the researchers examined the factors that could influence the implementation of an OnBill Financing OBF program in Dubai. The study included interviews with a range of institutional stakeholders involved in OBF program implementation.

According to Prof. Abu Hijleh, the OBF model was developed specifically to deal with the issue of the high upfront cost of renewable energy. He explains, “It has proven its success in other countries. Yet it needs proper regulations to encourage customers to engage in such a program. It is hard to predict the percentage of customers who will be interested in this as it will depend heavily on the structure and financing options offered to the customers.” The research looked into the challenges when implementing an OBF program locally. As per the findings, an OBF program could be implemented, but it would have to be a tailored OBF program that addresses the local context in terms of the project costs, repayment model(s), and potential hurdles.

Utility providers implement Demand Side Management (DSM) which focuses on regulating the energy efficiency “after” the utility meter. This entails the modification of customer behavior and/or the utilization of efficient technologies. Historically, DSM initiatives were designed to delay the need for new power plants. Yet efficient technology adoption has been slow with the biggest challenge being the high upfront cost of energy-efficient technology projects.

This is where OBF comes in. It allows utility customers to buy energy-efficient equipment and improve their building envelope without upfront fees. The utility provider, or a thirdparty investor, pays for the initial costs of the improvements, and the customer reimburses them through the utility bills. The new utility bills will include a repayment clause to recover the investment made by the utility provider. Even with this repayment clause, the total amount of the new bill will still be lower than what it would have been if the energy-efficient equipment had not been installed. Over the last decade, numerous OBF programs were implemented in the US and Europe as part of their national strategies for promoting the adoption of energy-efficient equipment and technologies.

The paper utilized forcefield analysis, Kurt Lewin introduced the forcefield analysis in the 1959s. It is an analysis tool that helps visualize and quantify (by strength) the driving and impeding forces, for a proposed change to understand the inducing and impeding force, which might affect the proposed OBF program after interviews were carried out. The researchers also conducted a qualitative analysis which comes under the interpretivism paradigm. Interpretivism is a research paradigm that emphasizes the human interpretation of reality's actions and interactions.

The results assessed that the OBF program should be run by third parties to keep the liabilities of the utility firm low. Yet the research also found that an OBF program in and of itself would not be enough to motivate building owners. The impact of implementing policy measures towards energy efficiency adoption was clear. Even in geographies having policies focusing on appliances, buildings, and automobiles, this may not be sufficient to drive efficiency adoption due to various technical, social, and economic factors. The need for exploring enablers to support the uptake of efficient energy adoption is crucial in this sense and makes such studies important. While the study focused on Dubai, the findings could easily extend to other emirates and even the wider GCC with minor tweaks depending on the utility providers in these emirates or countries. https://www.sciencedirect.com/science/article/abs/pii/S0957178722001199

The importance of the research is that it emphasizes how government policies and regulations are essential for achieving sustainability. Prof. Abu-Hijleh believes that the transition from the current business-as-usual model to an ecosystem that empresses and encourages sustainable activities requires a revision of existing regulations and the introduction of new regulations enabling the integration of new technologies and practices.

The study will be published soon.