By Maggie Molina | Thu, December 18, 25
As we wrap up the year, it’s a perfect time to pause, reflect, and look ahead. This year, our community faced incredible uncertainty, with abrupt federal policy shifts and funding changes that left many programs and customer benefits hanging in the balance. Yet, despite these challenges, our region made strong commitments to energy efficiency as a critical resource for our region at a time of rising energy prices and demand. We also faced policy tests on the future role of energy efficiency in our region.
Here, I highlight four themes as I reflect on 2025: trends in efficiency investments and need for steadfast leadership, the growing importance on energy resilience, the need for energy efficiency to lower bills, and the power of regional collaboration.
Investments and benefits from energy efficiency grew in 2025, but steadfast leadership is needed to meet 2030 goals
Our region invested about $5.5 billion in customer-funded energy efficiency and demand flexibility solutions in 2025. This level of investment tells us the important role that energy efficiency plays in our regional energy system and economy. But while it is helpful to track the dollars, the benefits are the real story: lower energy bills for customers, a more reliable grid, emissions reductions, and local job creation. These benefits lead to tangible improvements in people’s lives and in the resilience of our energy systems.
Looking ahead, we see projections for 2026 of investments continuing roughly at the same level as 2025. Larger states of Massachusetts, New York, and New Jersey stand out with estimated investments of about $1 to $1.5 billion per year, while other states combined make up another $1.5 billion per year.
But beyond 2026, the investment projections start to decline out to 2030 because states have not yet made those budget decisions. As concerns about energy affordability grow, we need steadfast leadership from states and regulators to double down on energy efficiency as the least-cost resource, helping customers lower their bills and system planners to rely on low-cost, demand-side solutions. Unfortunately, we have seen some bumps in the road as states face political pressure to reduce near-term costs including through budget cuts for energy efficiency programs.
When the grid needed it most, demand-side solutions improved energy resilience
This past summer reminded us of the importance of prioritizing energy resilience for our regional energy systems. During the June heat dome when temperatures reached 100 degrees Fahrenheit on June 24th in some parts of our region, and seven states in the Northeast tied or broke monthly high temperature records, energy efficiency and demand response programs lowered demand at times of grid strain.
For example, in Massachusetts, the MassSave Connected Solutions program delivered about 200 MW of reductions at peak demand times in late June. Efficiency and demand flexibility worked side by side with distributed resources like solar to provide stability needed to the grid. And baseload energy efficiency is estimated to have provided nearly 2 GW of load reductions in New England. This is a powerful reminder of the resilience value of energy efficiency and demand flexibility. These benefits will become more important as the Northeast region bears the impacts of climate change including extreme heat events.
As energy demand and prices rise, we must double down on – not cut – energy efficiency
We heard it loud and clear this year: electricity demand and energy prices are increasing. In the Mid-Atlantic region, where load growth is driven primarily by new data center loads, upward pressure on energy capacity prices in the PJM region led to higher prices for customers. In the New England ISO region, electrification of transportation and building energy loads are driving increase in load forecasts and system peaks are expected to shift from the summer to the winter in the mid-2030s.
In this environment of rising prices and demand, energy efficiency and demand flexibility are more important than ever as low-cost resources that help manage customer bills and system planners manage the grid. Why? The answer is two-fold. First, efficiency upgrades provide immediate and lasting benefits to households dealing with soaring bills. This is especially important for our most vulnerable households. Second, efficiency and demand flexibility serve as a hedge against rising energy demand and system costs to meet demand –they are lower-cost resources than building out new capacity, distribution, and transmission infrastructure.
Unfortunately, we have seen a troubling trend of policymakers targeting energy efficiency programs for budget cuts and rolling back building energy codes–in the name of short-term affordability. But cutting efficiency programs is short-sighted and will hamper immediate relief for households and undercut long-term benefits.
We must continue to document the multiple benefits of energy efficiency, arm our policymakers with the facts, and show up to tell the powerful story of energy efficiency benefits to our region’s households and businesses, energy systems, environment, and economy.
The region came together, reminding us of the power of collaboration
As the region faced uncertainty from the federal government, our states came together to continue progress on tried-and-true programs, weather the uncertainty of federal programs, and still launch bold, new initiatives.
For example, 5 states including Connecticut, Maine, Massachusetts, New Hampshire, and Rhode Island launched the New England Heat Pump Accelerator, a new regional market transformation program to advance efficient heat pump technologies. NEEP is serving as one of the conveners of this new initiative.
Led by NEEP, partners across the region also came together in working groups and cohorts to share knowledge, lessons learned, and innovative ideas. These included our working groups on Residential and Commercial/Multifamily Heating Electrification, Customer Rate Design for a Modern Grid, 2024 IECC implementation, State Energy Office collaboration, and more. These groups provide a platform for real-time problem solving as states across the region pilot new policies and programs to advance energy efficiency.
Looking ahead to 2026
This year, we were reminded of the critical importance of energy efficiency at times of rising demand and prices. And despite the federal uncertainty, our region demonstrated resilience, innovation, and commitment. As we step into 2026, our focus will be on energy affordability, energy equity, market transformation, and innovation, all to ensure that efficiency continues to deliver value for customers, communities, the environment, and the grid.
Energy efficiency for affordability
NEEP will analyze the latest benefits and costs of energy efficiency and demand flexibility as grid resources and examine new funding opportunities to complement customer-funded initiatives.
Energy equity
NEEP will also advance innovative policy and program solutions that put customer affordability first, from modern rate design reform to multifamily strategies that deliver benefits to low-income households including naturally occurring affordable housing.
Market transformation
To complement short-term efficiency resource acquisition and demand flexibility, we will also advance long-term market transformation initiatives. This includes the New England Heat Pump Accelerator, building energy benchmarking, codes and standards, and ramping up HVAC contractor networks and other workforce development initiatives across the region.
Emerging and innovative strategies
We will also highlight emerging technology and program strategies, such as central air conditioner (AC)-to-heat pump conversions including dual-fuel options, energy coaching programs, virtual power plants, and thermal energy networks for large energy users.
In 2025, we were inspired by the power of collaboration and leadership in our region. We look forward to delivering this work and building new partnerships in 2026.
