By Aditi Dalal | Sun, February 19, 23
Welcome to the first Regional Energy Data Dive of 2023. We are excited to announce that after spending the fall and winter collecting data for the newest update, we are ready to dig into what the numbers show. For the first time in REED history, we have collected data from Pennsylvania, allowing a more comprehensive view of energy efficiency programs in the Northeast and Mid-Atlantic.
While we are still putting the finals touches on the REED Master Workbook, some trends are starting to appear. Let’s take a dive in to see how energy efficiency savings have changed.
Most Effective Program Types
Recently energy efficiency programs have been entering a paradigm shift, from focusing on near-term energy savings to more long-term, greenhouse gas reduction strategies.
Using the 2020 data, we are able to see which program types were the most cost effective in achieving the two goals of energy savings and carbon reduction goals. To analyze this, we calculated net annual electric savings (MWh) per $1,000, net lifetime energy savings (MWh) per $1,000, and pounds of CO2 emissions avoided per $1,000.
From this, we get a sense of the most impactful program results from both a regulator perspective and from a program administrator perspective.
Below are the results.
Programs that target behavior and education get the quickest “bang for the buck” as they had the highest net annual energy savings per $1,000. Because education and behavior programs are less expensive to run and result in immediate savings, their return-on-investment in annual savings is higher than other program types. These programs are often home energy reports that highlight an end user’s total energy usage, compare their usage to their neighbors’ usage, and suggests ways to reduce consumption. These programs can also take the form of alerts that encourage residents to turn up their air conditioning to release load on the grid. They provide savings through aggregating the actions of many customers to optimize energy usage.
Programs that target the Commercial and Industrial (C&) sectors – both new construction and retrofits – provide savings over a longer period of time. Large C&I retrofits also provide a large return on investment as their energy savings last for a longer period of time and their projects tend to produce the largest amount of energy savings. Such retrofits may include new cooling systems for grocery stores or a sealed refrigeration system for restaurants. Massachusetts' Existing Building C&I Retrofit Program by NSTAR Electric ranked the highest with around $8 million MWh of energy savings for 2020. Additionally, new construction programs also have long lasting effects as efficiency is built into the construction from the start. This ensures buildings are properly sealed and use energy efficiently.
Programs that target appliance replacement and large C&I retrofits provided the most reduction in CO2 emissions. Appliance replacement programs provide emissions reductions as they allow customers to switch from fuel, natural gas, and inefficient electric appliances to higher performing electric appliances, lowering energy and emissions. Along with this, retrofits, especially for larger buildings, reduce energy need, lowering CO2 demand.
What this Means for Future Programs
What this shows is the need to create a mixed approach to implementing energy efficiency programs. Not every program will achieve optimal energy savings and GHG emissions, but a well-balanced approach can ensure that both of these priorities are getting tackled.
Policy makers and program administers should consider the balance between energy savings and GHG emissions. They can align their efficiency and climate goals with the upcoming Inflation Reduction Act funding because the funding provides opportunities for each of these categories. The HOMES and HEEHRA programs will allow administrators to dedicate funding towards residential energy efficiency and efficiency electrification. As shown in the data, retrofits and appliance programs can help administrators produce more long-term energy savings and CO2 reductions.
Additionally, states can encourage businesses to take advantage of tax credit 179D which allows commercial spaces to retrofit existing buildings. Owners will receive incentives based on the amount of energy saved from a project and have the ability to earn more through following certain wage and labor requirements. The next few years will provide many opportunities to grow these programs. It will be exciting to see how states funnel funding to different programs and prioritize various goals.