This is my last week as NEEP’s Executive Director. As I turn this page, I am reflecting on how much has changed and how much has stayed the same in the world of energy efficiency, and how organizations like NEEP are more critical than ever in ensuring that we continue to utilize the “first fuel” of energy conservation.
The NEEP region – the 12 Northeast and Mid-Atlantic states and the District of Columbia – has among the boldest greenhouse gas (GHG) reduction laws in the nation. With few exceptions, states have set 40 percent+ reduction in GHGs economy-wide by 2030, and 80 percent+ by 2050. To achieve these goals in the buildings sector, states are using an array of policy tools – from appliance and building performance standards to clean heat requirements. First and foremost among the available tools has been, and must continue to be, energy efficiency.
Decarbonizing our buildings – especially existing buildings and particularly the very old homes and buildings that dominate the Northeast – will be expensive. As the NEEP region electrifies, this presents an affordability and equity issue that we must address. This is exactly the time to recommit to – and ask more from – our old friend energy efficiency. Eight of the 10 highest-ranked states in ACEEE’s state scorecard for energy efficiency are in the NEEP region, and a multi-decade commitment to ratepayer-funded energy efficiency has supported sophisticated, high-achieving programs that reduce costs for customers and drive market transformation across the entire building sector. For over 30 years, the NEEP region has been demonstrating that maximizing and prioritizing the efficiency of a building reduces energy bills. But energy efficiency programs, and the framework that supports them, will need to change to meet the challenges of today and the future.
Already, states across the region are beginning to demonstrate how the traditional, ratepayer-funded energy conservation programs can evolve and work with new sources of funds to serve in an era of decarbonization. Regulators are valuing these non-energy benefits of energy efficiency, such as human health and greenhouse gas emissions (via the cost of carbon) and establishing goals for program administrators beyond the traditional energy units saved, including lifetime savings (to encourage longer measure life interventions), Kw (peak load reduction), equitable outcomes (to address historically underserved customers), and greenhouse gas reduction. New programs are lowering demand and putting electricity into the grid at specific times or in specific geographies, mitigating load impacts and to providing electricity to the grid from batteries and vehicles plugged into buildings and providing price stability and affordability for customers.
Legislatures are pushing efficiency programs to do new things as well. Some states have legislatively mandated fuel-neutral savings goals or emissions targets that have opened the door for fuel switching programs and beneficial electrification. States are also tackling the cost of decarbonization by braiding ratepayer funds with other sources of state and federal funding, such as weatherization funds, healthcare funds, and federal relief funds. This ability to weave funds from multiple sources to achieve deeper savings and better outcomes will be beneficial as federal funding from the Inflation Reduction Act (IRA) begins to flow, and will be essential after IRA funding ends.
There is still plenty of garden-variety energy reduction to capture. Only a few states have mandatory budget allocated to low-income customers in their programs, and underserved residential and commercial customers continue to be missed by many programs. The potential to serve low- and moderate-income households, renters, small businesses, non-English speakers, and disadvantaged communities is not only an equity imperative, but it is critical in providing an affordable path to building decarbonization that does not leave the underserved behind.
We used to joke (somewhat bitterly) that energy efficiency was always the “broccoli on the plate,” the good-for-you but unsexy workhorse that no one wanted to focus on but that got the job done. The last three decades have proven that energy efficiency programs are marvelously resilient, adaptable, and flexible. And while the days of cheap lightbulb replacements are ending, the Northeast and Mid-Atlantic will continue to demonstrate that energy efficiency programs can evolve to meet the challenges of the era. The region will show that energy efficiency is still the least cost source of energy in most of the region and is the bargain basement of GHG reduction tools.
For over 25 years, NEEP has made sure that energy efficiency is prioritized across the region, working to drive regional energy efficiency forward to transform markets and support the region’s goals. We work with hundreds of partners – state and local policy makers, utilities, community-based organizations, heat pump manufacturers, implementers, and more – to advance energy efficiency opportunities and make sure that energy efficiency continues to be valuable and valued. NEEP’s next Executive Director, Maggie Molina, is a nationally recognized energy efficiency leader with a track record of centering efficiency and environmental justice with clean energy. I am excited to watch how Maggie will lead this critical organization into the future.