By Maggie Molina | Tue, December 17, 24
The Northeast region has been a national leader in energy efficiency and in 2024 we saw the region reach new heights. From Maine to Washington D.C., states and cities launched major new energy efficiency programs and policies to help meet their goals for energy affordability, climate, workforce development, and energy justice. Here are some highlights as we look back on 2024 – both on actions by our regional leaders and ways that NEEP supported.
States and Utilities are Committing to Energy Efficiency, Decarbonization, and Equity in Multi-Year Plans
Energy efficiency helps lower energy costs for households and businesses, reduces emissions, and provides a low-cost and reliable demand-side resource to our energy system, as Lawrence Berkeley National Laboratory (LBNL) recently examined in a national review. They found that efficiency remains a low-cost energy and capacity resource at $0.02/kilowatt-hour saved and less than $120/kilowatt for peak demand savings. This means efficiency programs are less expensive than acquiring new generation, and targeted programs can defer or avoid expensive distribution system upgrades.
Recognizing this value and many other benefits, states in the Northeast are investing in long-term energy efficiency portfolios. In 2024, several states, including New Jersey, Maine, Massachusetts, New York, and Connecticut, held multi-year planning processes. In October, the New Jersey Board of Public Utilities (NJBPU) approved a $3.8 billion plan led by its utilities for 2025- 2027. Massachusetts Department of Public Utilities (DPU) is now considering a three-year, nearly $5 billion plan. We expect decisions for Massachusetts, Maine, and Connecticut in the coming months. Pennsylvania also recently kicked off planning for Phase V of its five-year energy efficiency program cycle to begin June 2026. NEEP provides technical assistance and often submits comments on these plans.
Importantly, these plans are making major strides to better align efficiency programs with multiple policy objectives including decarbonization and energy equity. For example, the NJ plan launches building decarbonization programs for the first time as part of its efficiency portfolio, and the MA plan would focus on scaling up access to efficiency investments and heat pumps in designated equity communities and reaching renters. See this earlier NEEP post for a deeper dive.
Leveraging Federal Funding for State and Community-Level Efficiency and Equitable Building Electrification
This year marked an unprecedented opportunity to leverage federal investments in energy efficiency and building electrification. NEEP convened states to understand these opportunities, such as the Department of Energy’s Home Energy Rebates program administered through state energy offices. Four states in our region (NY, ME, RI, and DC) have launched these programs and all other states in the NEEP region have submitted at least one of their program applications and are awaiting approval. NEEP also published resources to help states leverage this funding with existing programs, including Expanding the Energy Savings Pie: Attribution Frameworks to Align IRA Home Energy Rebates and State Programs.
The New England Heat Pump Accelerator is a major new regional program that will be launched soon thanks to a grant through the Environmental Protection Agency’s Climate Pollution Reduction Grant (CPRG) program. The Accelerator is a coalition of five states – Connecticut, Maine, Massachusetts, New Hampshire, and Rhode Island – to leverage regional market transformation to increase the adoption of efficient cold-climate heat pumps and heat pump water heaters in single- and multifamily buildings. The project will provide midstream rebates through heat pump distributors and contractors, innovation hub grants for low-income and disadvantaged communities (LIDACs), and a resource hub to provide consumer resources and workforce training on heat pump installation, sizing, and operation.
The Accelerator, in combination with state and utilities investments, will be critical to meeting the region’s goals for heat pump adoption. Earlier this year, nine states (six of these in the NEEP region) signed an MOU committing to ensure the technology makes up 65 percent of HVAC sales by 2030 and 90 percent by 2040. A forthcoming heat pump market assessment by NEEP will document progress in the region toward these goals.
Across the region, local and community-level energy efficiency projects are also getting off the ground with the support of federal programs. For example, NEEP served as regional convener of the Building Upgrade Prize (Buildings UP), and communities in New Hampshire, Connecticut, and Vermont are investing in Community-Driven Transportation Plans for the Northeast with the support of the Department of Energy and convening support by NEEP and multiple project partners.
Advancing Solutions for Large Buildings including Multifamily
Building Performance Standards (BPS) require large existing buildings to invest in energy efficiency and other clean energy upgrades over time. Many Northeast cities and states are leading the way on BPS, as we profiled in Insights into BPS in the Northeast Region, including five cities, one county, and one state (Maryland). Last week, Maryland reached a major milestone by finalizing its Building Energy Performance Standards for buildings 35,000 sq. ft. and larger. Covered buildings in the program will aim to achieve zero net direct greenhouse gas emissions by 2040 through energy efficiency and other clean energy strategies.
BPS is one policy option, but the region will need more solutions to upgrade large buildings, including multifamily buildings. About one in every three households in the Northeast live in a multifamily household, and low-income multifamily households have the nation’s highest energy burdens. Yet, these customers are too often underserved by energy efficiency programs. Policymakers and program administrators are taking steps to fill this gap. This year, NEEP began building a multifamily initiative to work with regional partners including local governments, utilities, community-based organizations, and program administrators.
Workforce Development to Support the Region’s Growing Number of EE Workers
Energy efficiency is an economic powerhouse for the region. Hundreds of thousands of workers are employed in the manufacturing, construction, building operations, and sales of energy-efficient products and practices in the region. According to the 2024 U.S. Energy and Employment Report (USEER) and data compiled by the Energy Efficiency Jobs in America report, the Northeast region supports an estimated 500,000 jobs and more than 75,000 businesses in energy efficiency – a three percent increase over 2023. In fact, efficiency is the largest energy sector for jobs in nearly every state in the region.
But our region faces substantial workforce gaps and contractor needs as we scale up investments. Recognizing this, states and utilities are stepping up their commitments to workforce development. For example, MA proposed doubling its efficiency workforce investment from the previous plan to increase initiatives that create a more diverse workforce, continue the Heat Pump Installer Network, and expanding opportunities for commercial and industrial workforce training.
Tackling Challenges and Looking Ahead
While we saw major progress in 2024, our region also faced some major challenges to meet ambitious climate and affordability goals. Federal funding opportunities now face new uncertainty, for example. Electricity prices have been on the rise, and while nationally these increases have generally tracked inflation, increases have been higher in New England. And as future load growth becomes a growing concern, long-term planning and reliability will be critical. Energy efficiency investments will be an important component of comprehensive solutions to address these concerns.
Next month, I will be looking at what’s ahead for energy efficiency in our region in 2025 and sharing priorities for NEEP. The region’s leadership in energy efficiency was laudable in 2024 and will be more important than ever in 2025.