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Split Incentives

Split incentives can impact both renewable energy and energy efficiency investment decisions and are most widely associated with situations where a potential end user is a tenant that is leasing a home, commercial or industrial space from a landlord and where the tenant pays their electricity bills directly. The landlord may not be financially incentivized to allow for energy efficiency or renewable energy improvements where they would be required to provide some direct investment or a significant time when ultimately the tenant would be the direct beneficiary.

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