Evaluation of the German Funding Scheme for Energy Efficiency in the Economy: Classical versus Competitive Financial Measures

The Federal Funding Scheme for Energy Efficiency in the Economy (EEE) is a core scheme for enhancing energy efficiency and for reducing greenhouse gas emissions in German companies. Among others, it offers funding for “energy optimizations of plants and processes” in companies. Due to a harmonized set-up and a common evaluation methodology, the EEE provides the opportunity to take a closer look at almost identical grant-based, credit-based and competition-based funding lines. The paper aims to investigate the differences in the uptake of these dissimilar modes of funding by eligible companies. It thus seeks to make an empirical contribution to further understanding the advantages and disadvantages of market-based and classical funding instruments. The results suggest, among others, that despite the almost identical set-ups, the reached target groups differ by funding mode. This implies that the different modes seem to meet the needs of different companies. Consequently, without further discussing the public costs of funding policies, offering several funding modes may enlarge the impact of funding schemes.