Gross and Net Savings Principles and Guidance

Energy efficiency policy is in the midst of dynamic evolution.  The Forum project to deliver gross and net savings guidance is available as of May 2016.  It is designed to provide a framework that can be used or adapted to help stakeholders assess gross and net savings issues in the context of overall EE policy decisions. The Forum’s net savings research was conducted over the course of many years.  It was motivated by three issues: 1) lack of consistency in definitions and measurement in the Northeast; 2) expanded use of energy savings by diverse audiences, particularly with applications to climate change policies; and 3) increasing challenges of determining program “attribution” – that is, establishing savings resulting from an energy efficiency program.

The Forum is pleased to present the following guidance documents:

Gross and Net Savings Principles and Guidance: This provides six core principles to inform states’ decisions regarding their applications of gross and net savings based on policy goals, and it provides a framework/template for making and documenting these discussions and decisions.

Supplemental Document #1 - Current and Evolving Policies, Issues and Methods Pertaining to Gross and Net Savings: This provides context for the principles by summarizing some trends the role of EE programs in state energy policy, infrastructure reliability and resiliency planning, and emission reduction strategies, including the NY REV and the EPA Clean Power Plan (CPP) Section 111d. Of particular interest for this paper is how NS are considered within these various contexts. Also discussed are evolving methods for estimating NS, including discussions on the common practice baseline methods, market effects modeling, top-down macro-economic modeling, and the expanding role of the random control trial method.

Supplemental Document #2 - Decision-Framework for Determining Net Savings: This is a high level summary of the methods and approaches used to estimate net savings parameters and their pros and cons, and programs where methods are suitable. Prepared in 2014 for the Forum, the material is largely based on the DOE Uniform Methods Project chapter on Net Savings (DOE UMP, 2014).

Gross and Net Savings Decision Making Framework and Template: The Framework developed in 2016 on behalf of the Regional EM&V Forum is delivered here as a standalone product, excerpted from Gross and Net Savings Principals and Guidance.  It is intended to be used to support and document policy decisions in which gross and net savings play a role.

Previously developed resources include:

  1. Net Savings Scoping Paper (11/2010)
  2. Regional Net Savings Research, Phase 2: Definitions and Treatment of Net and Gross Savings in Energy and Environmental Policy (12/2012)
  3. Model EMV Methods Standardized Reporting Forms (7/2014)
  4. DOE Uniform Methods Project chapter on Net Savings (DOE UMP, 2014) (Forum members participated in the working group for this product)
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