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ACEEE Blog

How understanding the psychology of energy efficiency can help protect the environment
December 01, 2016 - 12:39 pm

By Reuven Sussman, Manager, Behavior Program


Why do some people take action to reduce their energy consumption and carbon footprints while others do not? Environmental psychologists, behavioral economists and other social scientists have all investigated this question, and come up with a variety of answers. A new report, sponsored by the Pacific Institute for Climate Solutions and co-authored by ACEEE, explains the psychology of individual energy efficiency actions, and how large scale behavior change programs can use this research to reduce greenhouse gas emissions.

Theories of change

One of the theories examined in the report is the theory of planned behavior, which suggests that people are influenced by how they think about their behavior. Will taking this action be good, or will doing it makes me feel happy? Are other people doing it? How easy is it to do? According to this theory, programs that target attitudes, perceived social norms, or perceived difficulty of the behavior, may successfully change behavior.

Real world application

Based on these theories, utilities and policymakers have created programs that motivate behavior change to reduce energy consumption, increase efficiency, and mitigate climate change. Strategies such as providing feedback to customers, recruiting champions of change to promote energy efficiency, or introducing a competition are three of the more common strategies. These and others are often combined to maximize the effectiveness of the program and create a lasting change that can significantly reduce energy consumption and greenhouse gas emissions.

Behavior change is only part of the solution

States, utilities, and businesses interested in promoting energy efficiency or climate action don’t have to wait for top-down policies at the federal level to begin. This report is a concise resource for anyone interested in implementing a behavior change program. However, if we are going to make the changes necessary to really tackle climate change, psychology-based behavior change programs are only part of the solution; they work best when combined with traditional incentives, policies, and laws. 


What's next for vehicle fuel economy?
November 30, 2016 - 2:11 pm

By Therese Langer, Transportation Program Director


The Obama administration has been a great champion of higher fuel economy and corresponding reductions in vehicles’ emissions of greenhouse gases. There’s no reason to expect continuity in this area from the new administration, and an advisor to president-elect Trump has indicated that fuel economy and emissions standards are on their radar.

Standards for cars and light trucks of model years 2022-2025 are currently under review by the Environmental Protection Agency (EPA) and the Department of Transportation’s National Highway Traffic Safety Administration (NHTSA). In an extensive and robust technical assessment report (TAR) issued in July as part of the review, the agencies found that the standards as adopted in 2012 are achievable and cost-effective. ACEEE’s comments on the TAR noted that, based on current information on technology cost, effectiveness, and deployment trends, the standards in fact could be strengthened.

Today, the EPA announced its proposed determination that the standards for model years 2022-2025 “remain appropriate,” starting the clock on a 30-day public comment period. EPA’s conclusion is hardly a surprise in view of the TAR findings. It’s worth noting that the proposed determination states that the technical record “could support a decision to adopt more stringent standards for 2022-2025.” However, in support of regulatory stability and long term planning, the EPA proposes instead to reaffirm the existing standards, having concluded its review of the comments submitted on the TAR.

EPA’s action should inform the remainder of the standards review process, which will unfold in the coming months:

  • NHTSA is required to conduct a full rulemaking on the model year 2022-2025 standards. However, as EPA’s co-author on the TAR, NHTSA has the technical basis for a proposed rule under its belt. There’s no legal requirement that fuel economy standards align with greenhouse gas emissions standards, but the close relationship between improving fuel efficiency and reducing greenhouse gas emissions means that automakers strongly prefer that the two standards be harmonized.
  • Automakers were already lobbying hard for a rollback of the 2022-2025 standards prior to the election. The manufacturers’ trade association sent a letter to the transition team on November 10th requesting various steps be taken to weaken the standards during the review process. But how far they’ll want to go is unclear, since the manufacturers and their suppliers have already invested substantially in the technologies needed to reach the 2025 standards. And the global vehicle market will continue to evolve toward lower-emitting vehicles.
  • A crucial factor here is the role of California, which has the ability to set its own vehicle standards. Given its ambitious carbon emission reduction goals, California is likely to uphold or strengthen its 2022-2025 car and light truck standards, which are consistent with the standards now under review by the EPA and NHTSA. Manufacturers strongly dislike having different standards for California—and the 10 other states that follow California standards--and the rest of the country.

Standards for heavy-duty vehicles are less likely to be challenged. “Phase 2” fuel efficiency and greenhouse gas standards for these vehicles were finalized in August (out to model year 2027) with considerable industry support. At least one member of Congress is interested in taking on the new standards despite that broad-based support, and the standards could be subject to disapproval under the Congressional Review Act. But the incoming administration has yet to indicate any particular interest in revisiting this rule, which will put the United States at the forefront of global efforts to raise the fuel efficiency of commercial trucks and ensure that US vehicle technologies remain competitive on the international market.  


Intelligent efficiency is surging: let’s talk about it
November 28, 2016 - 9:41 am

By Ethan Rogers , Program Director, Industry


This is not how your grandparents saved energy. They may have told you to turn off the lights or put on a sweater. They offered good advice, but times have changed beyond what they probably ever imagined. Technology is making it possible to do so much more. It gives us “intelligent efficiency,” now moving faster than ever.

Consider how smart phone apps help you navigate around traffic or smart thermostats adjust your home’s temperature automatically. They are examples of what ACEEE has dubbed “intelligent efficiency” -- the use of sensors, connected devices, data analytics, and the Internet of Things to save energy. It may be the key to scaling energy efficiency in all sectors of our economy.

As we’ll discuss at our third annual Intelligent Efficiency Conference next week in Austin, intelligent efficiency is changing how we do business. A smart thermostat, for example, asks how warm or cool you want to be, collects information from your home, accesses data in the Cloud that you didn’t even know existed, and uses that information to optimize both your comfort and energy use. You will have no more need to understand the math behind the magic than you do when you ask Google to find you a restaurant.

On a societal scale, intelligent efficiency is going to change our energy markets. Automated control of buildings will help utilities improve network reliability and efficiency. Smart thermostats will respond to demand signals to reduce the grid’s peak load, and business customers can respond to a time and locational price signal from grid operators.

Like most issues involving IT, the uses of intelligent efficiency are quickly evolving. Stakeholders across the policy spectrum are scrambling to stay on top of the latest technological developments and to understand how they will affect the energy sector. They need to ensure existing policies adapt and new policies don’t have unintended consequences.

Will changes in federal policy help or hurt?

While recent elections at the federal and state levels could impact the future of energy efficiency, advances in intelligent efficiency appear unstoppable. The private sector is creating new business models that leverage technology to track savings and monetize the social value of investing in energy efficiency.

But will the newly elected help move us forward? As we all know, policy can lead, follow, or get in the way. Let’s talk about it!

Find out what’s coming next and be part of the future at our upcoming Intelligent Efficiency Conference. While we’ll discuss these issues and the impact of the 2016 election, we’ll also give registered attendees a chance to toot their own horn. This year, we’re offering two Trading Space sessions for shameless self-promotion. We want to spur connections that lead to new research, products, services, and projects. Two of last year’s Trading Space presenters collaborated to apply for and win a Department of Energy grant. So join us and don’t get left behind.


The Clean Power Plan and energy efficiency: where do we go from here?
November 21, 2016 - 4:22 pm

By Sara Hayes, Sr. Manager and Researcher, Air and Climate Policy


As another round of global climate talks has concluded, many observers wonder whether the 2016 election means the end of greenhouse gas regulation in the United States. More specifically, what happens to the Clean Power Plan?

Even before the election, the Clean Power Plan was already years away from being finalized. Implementation of the rule is currently stayed as it moves through the courts. Even if it sails through the courts unscathed and the original compliance schedule remains in effect, states would not have to meet their first targets for curbing power plant emissions until two years after the next presidential election (2022).

When it comes to environmental regulation, it’s best to take the long view. Rulemakings made pursuant to authority under the Clean Air Act are generally litigated and take years to develop. They often span across multiple administrations. Take the Cross-State Air Pollution Rule, the Environmental Protection Agency program to limit emissions of nitrogen oxide and sulfur dioxide. It took decades to evolve. There were multiple years when the EPA didn’t act or the rulemaking just sat in courts.

If the question is: Will we implement a final rule called the CPP? Probably not, but the Supreme Court and the Clean Air Act require the EPA to regulate greenhouse gases from existing power plants. How a Donald Trump administration might navigate this issue is an open question with multiple potential paths. Here at ACEEE, the Clean Power Plan has been a major area of focus, but not for the reasons you might think. 

The Clean Power Plan never contained any requirements for energy efficiency. Yet it shined a spotlight on energy efficiency and its effectiveness in reducing greenhouse gas emissions. It was a very visible effort that got people thinking about energy efficiency because of its health and environmental benefits. It sparked conversations between utility regulators and air regulators in states—some of whom had never considered the emissions reductions they had been achieving through existing energy efficiency programs. I feel fairly confident in saying that either the prominent role of energy efficiency in reducing greenhouse gas emissions wasn’t well understood, or the policy mechanisms and tools for implementing such efficiency weren’t well understood.

The work that needs to be done has never been about a single rulemaking. All of the health and environmental benefits that come with energy efficiency are still possible, with or without the Clean Power Plan. Energy efficiency has always been here, and it will remain vital for our health, economy, and infrastructure resiliency. Furthermore, states will continue to bear the primary responsibility for protecting public health. The Clean Power Plan was designed to reflect a direction in which the states were already heading. Data from the Energy Information Administration shows that even without the rulemaking, greenhouse gas reductions from the power sector have been steadily declining. States are already reducing greenhouse gases and using energy efficiency to create jobs, improve housing, and protect the safety and security of low-income and fixed-income families.

 

We’ll see what happens with the Clean Power Plan, but in the meantime, we can move ahead with good policies that can be implemented with ‘no regrets’ during this period of regulatory uncertainty. States and cities can create jobs, reduce energy costs, and position themselves for a competitive advantage with energy efficiency. Whether you’re Republican or Democrat, wealthy or financially struggling, saving energy is a good idea. 

 


How to create big opportunities to save energy for small businesses
November 21, 2016 - 1:50 pm

By Seth Nowak, Senior Analyst


Given the importance of small businesses to our national economy, ACEEE has examined successful utility program practices in the small commercial segment. We find there are still significant energy efficiency opportunities. Our new paper describes effective program strategies.

Our findings are crucial, because as we’ve written before, small businesses are critical to the health of local economies, generating more than half of net new private sector jobs. They also occupy more than 20 billion square feet that require energy for heating, cooling, lighting, and other purposes; their square footage represents more than 30% of all commercial space. Accordingly, small businesses comprise a large market for electric and natural gas utilities.

Small business may be a hard-to-reach but not impossible-to-reach market

Despite their importance, small businesses have often been underserved by utility energy efficiency programs. According to EnergySavvy, small-to-medium commercial and industrial utility customers are the “forgotten middle.” They represent 90% of US businesses and consume about 20% of US energy, but they attract less than 4% of utility energy efficiency spending.  

Utility program managers have long considered small commercial customers difficult to reach because of participation barriers faced by small business owners, such as lack of staff, time, money, and awareness of program offerings as well as energy efficiency benefits in general.

Addressing these barriers is not always enough to persuade small business customers to participate in programs. Structural and economic limitations hinder program managers from providing programs that garner broad participation and simultaneously capture deep savings. The small business sector is diverse in terms of industry, energy uses, savings opportunities, financial needs, languages spoken, building types, and cultures. These differences have important implications for program design.

One-size-fits-all approaches remain important, but only go so far

Most small business energy efficiency programs have tried to overcome these barriers using two primary strategies. First, they provide efficient lighting measures that have wide applicability and relatively quick paybacks. Linear fluorescent and LED lamps, fixtures, and controls deliver highly cost-effective savings to almost every type of small, non-residential utility customer. Second, utilities make participation easier for customers by providing direct installation of qualified measures and high rebates or even free installation. The simple, convenient offerings save the business owner money right away.

On the other hand, many small business programs only offer lighting measures, and even among several of the most well-established programs, 90% of electric savings come from lighting. This leads to lost energy efficiency opportunities. Yet it is possible to address the diversity of small businesses with enhanced program design and to capture savings from a wider variety of energy end-uses. In small grocery stores, for example, refrigeration represents 44–57% of total electricity consumption. Even more significant, most small business programs are electric-only; they don’t provide any natural gas savings measures for space heating, water heating, or cooking. 

ACEEE sought to find out what leading programs have been doing to enhance performance. We found emerging trends that may bear fruit in the future as well as program designs and features that are already delivering results.

If I’m a program administrator, how can I reach more customers?

Many of the successful practices embody a shift toward a more customized and customer-centric model. Here’s what we recommend:

  • Segment the market and provide customized offerings for each sub-segment
  • Tailor and target marketing and communications to provide personalized and relevant messages
  • Offer zero-interest or low-interest financing to encourage comprehensive retrofits and deeper savings
  • Offer a wide set of eligible measures, for multiple end-uses, based on target market research and data analytics
  • Provide dedicated project managers to give customers direct technical assistance, education, and support on energy efficiency
  • Establish partnerships with an area’s Chamber of Commerce, small business advocacy organizations, and community groups that can provide access to more commercial customers and engage them as trusted local partners

For more information, check out our report, and join us for an upcoming webinar on energy efficiency for hard-to-reach customer groups, including small businesses. Register for Serving All Customers with Utility Energy Efficiency Programs at efficiencycities.org.

 


How residential utility programs could reach more diverse households
November 13, 2016 - 4:36 pm

By Marti Frank, PhD


Many energy efficiency programs are designed around measures rather than people. These “untargeted” programs focus on meeting energy savings and cost-effectiveness goals, and are ostensibly impartial about the characteristics of the households that receive the offering.

Our new examination of program demographics shows how, in practice, untargeted programs often limit participant diversity. We reviewed every residential program evaluation in California for the 2010-2012 program cycle, and found participants in some of the biggest programs were substantially less diverse than the population. Energy Upgrade California (EUC) and Home Energy Efficiency Rebate (HEER) program participants, for example, were more likely to be white, upper income, college educated, or English speakers.

We explain these findings, and point the way toward greater equity and diversity in participation, by drawing on a categorization scheme for social programs and identifying three program design elements that influence participant diversity.

Three reasons why program participants may not look like the general population

1. Buy-in cost: the amount a household is required to spend in order to participate.

The buy-in cost for efficiency programs ranges from a US average of $6,000 for a home energy retrofit, to $500-$3,000 for an energy-efficient appliance, to -$50 for refrigerator recycling (the program pays the participant).

Our data show that a high buy-in cost correlates with a less diverse participant population. Participants in programs with the highest buy-in costs, EUC and HEER, were less diverse than California’s general population. Participants in the program with the lowest buy-in cost, refrigerator recycling, looked almost exactly like the population. Figure 1 shows the income distribution of participants in three programs: EUC, HEER, and refrigerator recycling, compared to California’s general population.

* Some EUC program evaluations did not report incremental income data for participants with incomes under $100,000.

A natural experiment during the study period provides another illustration of the relationship between buy-in cost and participant demographics. For several months during the 2010-2012 program cycle, the availability of American Recovery and Reinvestment Act funding doubled the financial incentives for the EUC program. Households that participated when incentives were higher (and presumably their out-of-pocket cost was lower) had lower incomes, lower home values, and were more likely to live inland.

2. Outreach and marketing: the language, format, and channel through which program information is communicated.

The language in which a program communicates to participants is an important determinant of participant diversity. Nearly 40% of Californians say their primary language is something other than English. But California’s biggest-budget efficiency programs communicated nearly all program information in English, and most evaluation surveys were conducted in English.

Efficiency programs that communicated in languages other than English succeeded in reaching more diverse populations. Figure 2 shows the income distribution and race/ethnicity of participants in the Community Language Education and Outreach (CLEO) program, which provided energy efficiency information in Asian languages and Spanish.  

3. Implementation method: the many ways in which a program can be delivered

Program designers face an overwhelming number of options when it comes to program implementation, and their choices influence participant diversity. The best example from our data set is an experimentally designed pilot program for refrigerator recycling. When big box retailers implemented the program, participants had higher incomes, larger homes, and recycled newer, larger, side-by-side refrigerators, compared to participants in a utility-run program.

There are many research opportunities to explore the relationship between implementation approach and participant diversity. Our data only allowed us to begin to address questions about the demographic impact of choices, like in-person vs. online education.

Calls to action

There is a critical need for evaluators to consistently collect, report, and analyze demographic data. Nearly one-third of the evaluations we reviewed did not collect participant demographic data. Even among evaluations that did collect demographics, nearly one-third did not publish those data. And only a quarter of evaluations used demographics to analyze program performance.

Program administrators, designers, and implementers can play a key role in increasing participant diversity by using demographic data to identify underserved populations, assess their barriers to participation, and design programs to meet their unique needs. A recent ACEEE report provides information on best practices for reaching diverse participants in the multifamily sector.

Policy makers, too, can use participant demographic data as a resource to establish diversity goals for efficiency program portfolios. And future research should expand the investigation of participant diversity to programs in other regions of the country.

Marti Frank is an evaluator and program designer who works on climate change and social equity issues. Seth Nowak is co-author of the California diversity study and contributed to this blog post. 


What do the 2016 election results mean for energy efficiency?
November 10, 2016 - 4:35 pm

By Steven Nadel , Executive Director


Now that the hard-fought 2016 election is over, I think it is useful to consider its impact on energy efficiency policy. No doubt, a lot of uncertainty remains because of President-elect Donald Trump’s lack of specificity on many issues. Yet given the bipartisan, good-for-business appeal of energy efficiency, I see potential paths forward and work to be done. Of course, we also need to be ready to defend against legislative or administrative attempts to roll back current energy efficiency policies, programs, and funding, which could wipe out the major energy bill savings, job growth, and health benefits that we have achieved.

President-elect Trump has said very little about energy efficiency, so what happens in a Trump administration is likely to depend on his senior appointments, such as the new secretary of energy and the new administrator of the Environmental Protection Agency. Trump has spoken a bit about climate change, which he called a hoax created by the Chinese to suppress the US economy (although he’s tempered these comments more recently). He’s pledged to end the Clean Power Plan and to withdraw from the Paris climate change treaty. To change either of these could well require a multiyear process but he might do little to follow through on either one and essentially let them be unimplemented. And years ago, he said green buildings have not been perfected yet and that it takes 40 years to get your money back, but he also noted that this could get better with technology (see here).

Potential Opportunities

Despite these comments, there may be opportunities for progress. In his victory speech, Trump pledged to increase infrastructure spending. Energy efficiency could be part of that. An infrastructure package could include investments in transportation, water systems, high-speed Internet, and a smart grid, all of which can contribute to economic growth and efficiency. Another possible place for action is tax reform, a very high priority of House Speaker Paul Ryan. While tax reform will primarily focus on tax rates and tax simplification, some energy efficiency provisions might be included, such as overhauling commercial depreciation rules that discourage investments in commercial equipment and changing energy efficiency tax credits so they are performance-based and phase out when markets are transformed (ACEEE is working on both of these issues – see here). And if energy legislation does not pass this year (currently a House-Senate conference committee is working to resolve differences between House- and Senate-passed bills), energy legislation could return next year.

There may also be a few market-oriented areas of opportunity including:

  • Work to promote “smart” technologies including smart buildings, manufacturing, transportation, cities, and the grid.  As documented by ACEEE, there are large opportunities in these areas, and the US can be a world leader.
  • Work on energy use benchmarking and transparency to better inform home and building owners about their energy consumption and unleash the power of the market on strategies to reduce this use.  This might include making energy use data more accessible to consumers and to vendors they authorize to evaluate their data.
  • Work on financing for energy efficiency, including its role in the mortgage process and financing for retrofits.
  • Work on a private-public financial mechanism known as energy savings performance contracts that are budget neutral and produce significant energy savings, especially in institutional facilities.

While the focus of this blog post is national policy, the election also affected governors in several states. With Washington likely to do less on energy efficiency, more of the focus for positive gains will switch to the state and local level. The biggest change may happen in North Carolina where the current governor, Pat McCrory, has not been especially supportive of energy efficiency. He appears to have lost his re-election bid by a razor-thin margin, and Governor-elect Roy Cooper is expected to be more supportive of energy efficiency. However, he’ll have to work with a Republican legislature. In addition to North Carolina, the governor’s mansion is switching control in three other states: Vermont, New Hampshire, and Missouri. The new governors in Vermont and New Hampshire probably will not change energy efficiency policy very much. We don’t know much about the new governor of Missouri. In 2016, governors were elected in 12 states; two seats come up in 2017 (New Jersey and Virginia) and the remaining 36 are up in 2018. We also note that Senator Rob Portman’s double-digit victory in Ohio is a strong vote for a moderate Republican in the state, and will hopefully encourage Ohio Governor John Kasich to continue to hold firm against proposals that weaken energy efficiency policy there. ACEEE has worked with Senator Portman on energy efficiency issues for many years.

These are emerging thoughts, and I’m sure the landscape will evolve more as President-elect Trump and other incoming elected officials shape their agendas. ACEEE will keep an eye on these developments and will blog again on these topics once agendas become clearer.


Our new guide helps separate the Pikachus from the Digletts of energy efficiency behavior-change programs
October 18, 2016 - 1:00 pm

By Reuven Sussman, Manager, Behavior Program


In the energy efficiency world, programs that reduce energy use by targeting human behavior are relatively few, but proliferating quickly. In 2013, some US states claimed as much as 28% of their energy efficiency savings from behavior change programs. Like Pokémon Go characters in the wild, some behavior change programs are common, well-known, and seen everywhere. Others are rare and largely unknown. Still others are rarely seen but hold great potential. Utility program administrators may be familiar with a few of these programs, but an expert guide can help identify others and explain the best methods for capturing, collecting and using all of them. A new ACEEE report provides a thorough guide for understanding the world of energy efficiency behavior change programs, and why they work.

Home Energy Reports, the Diglett of behavior change programs

By far, the most common behavior change program implemented by utility program administrators are home energy reports (HERs) that feature social comparison information. These programs reduce energy consumption by giving residents reports on their energy use every one to four months (in addition to their monthly energy bills). The reports tell residents how much energy they used in comparison to similar homes in their region and include tips on how to reduce energy consumption. HERs have been implemented by utilities since 2008 and consistently reduce electricity use by about 1-2% (and gas by roughly 0.5-1%) by the end of their second year. The ACEEE report summarizes 30 such programs that were evaluated since 2013, and examines questions such as: How long do savings persist? Should HERs be delivered by paper or email? Should participants be automatically enrolled? How frequently should HERs be delivered? Like Diglett, these programs are common and well known. They play a significant role in shaping the landscape of behavior programs.

Games and competitions, the Pikachu of behavior change programs

For those interested in slightly more exotic behavior change programs, there are games and competitions. These proliferating programs are becoming the go-to-strategy for utilities and third parties interested in reducing energy consumption through behavior change. Like a rare Pikachu in the wild, they are quick, but their stamina (HP) is unknown. Though they can effectively change behavior, more needs to be learned about their long-term effectiveness. Utilities have implemented competitions between individuals, businesses, buildings, neighborhoods or even cities. For example, a series of competitions between commercial offices in Northwest USA resulted in 2-6% electricity reduction. Games such as Cool Choices make saving energy within a workplace fun and, in the process, reduce electricity consumption by as much as 6.6%. However, games and competitions can’t last forever. They motivate participants to save energy by rewarding the highest achievement when the event is complete. Although initial research suggests that energy savings likely persist after the end of the program, more data is needed.

Education Programs in K-12 Schools, Dragonite or Mew?

Education programs in K-12 schools frequently claim that they can reduce electricity use by 20% or more, but their methods of evaluation are usually weak or unknown. As such, these may be rare and powerful Dragonite-like programs, or they may continue to be mysterious Mew-type programs. More research is required to determine their true impact and long-term effectiveness.

Capture difficulty: Which social science strategies make behavior change programs effective?

Behavior change programs may work in different ways, but they all benefit from integrating research on psychology and human behavior. For example, community-based programs sometimes solicit pledges from homeowners to reduce their energy consumption. This element is effective because research shows that people who make public commitments to energy savings are more likely to take action than those who make private commitments or no commitments at all. According to one meta-analysis, the most effective strategy may be to use an energy champion or leader with a social network to promote the behavior change. Volunteer leaders or trusted messengers are effective at changing the behavior of their friends, family, co-workers, or community members, because they are trustworthy and credible, and because they can exert a degree of social pressure. Including this element can strengthen most group-based efforts such as competitions, education programs or strategic energy management. Public commitment and energy champions are just two of many tested strategies that make behavior change programs effective.

Feeling lost?

For those wanting to navigate the energy-behavior wilderness or nurture their own behavior change programs to maturity, the ACEEE guide to Behavior Change Programs: Status and Impact picks up where the 2013 Field Guide to Behavior Change Programs left off. There are many behavior change programs out there, each ranging in effectiveness and applicability. This guide helps to identify a variety of programs, from common to rare.


New research shows Michigan could actually profit from Clean Power Plan compliance
October 14, 2016 - 10:14 am

By Martin Kushler, Senior Fellow


My home state of Michigan recently released two reports summarizing how Michigan could comply with EPA’s Clean Power Plan requirements.  As has been the case with numerous other analyses, they found energy efficiency to be a core strategy for reducing the total costs of Clean Power Plan (CPP) compliance.  In fact, the modeling showed energy efficiency would help Michigan achieve excess carbon credits, which could be sold to other states. As a result, a Michigan compliance plan would cost less than a “business as usual” future with no CPP policy at all!

Setting efficiency targets pays off in Michigan

The importance of energy efficiency was emphasized by the executive director of the Michigan Agency for Energy, Valerie Brader.  She noted that expanding Michigan’s utility energy efficiency programs beyond the current statutory 1% annual savings requirement “is absolutely key to our energy future”, and would result in lower total costs to ratepayers than a business as usual path.  She added: “This is absolutely vital to control Michigan’s energy costs in the future.  It is saving us literally billions of dollars.”

While Michigan is officially “pencils down” in terms of working on CPP issues, until the courts lift the current ‘stay’, they did allow some modeling work that had been previously contracted-for to proceed to completion.  These results should be very helpful in guiding policy when CPP planning resumes.

Among the key findings were analyses which showed that doubling the state’s Energy Efficiency Resource Standard for utilities from 1% annual savings to 2% would produce net savings of an additional $900 million compared to a compliance plan with the current 1% standard. The modeling results also revealed that using a mass-based approach and engaging in interstate trading (to sell excess credits) would be the most advantageous path for Michigan.

Resources to get started in your state

The final Clean Power Plan rule makes it clear that energy efficiency has a big role to play to reduce greenhouse gas emissions. ACEEE has done extensive work examining the implications of using energy efficiency as a Clean Power Plan compliance approach and consistently finds opportunity for efficiency to eliminate pollution at a lower cost than the alternatives. Tools such as ACEEE’s SUPR calculator and Synapse’s CP3T are free and can provide states with a first look at the role energy efficiency can play in different states.

Michigan’s new analyses tell us what we at ACEEE know to be true for most states: energy efficiency puts the state in an excellent position to adopt a compliance approach that improves both the state economy and citizen health through reduced pollution. We hope that policymakers and regulators take notice of how effective and beneficial energy efficiency can be in achieving Clean Power Plan compliance.


Here’s how we scale up participation and savings in residential retrofits
October 12, 2016 - 10:00 am

By Jennifer Thorne Amann, Buildings Program Director


Our existing housing stock is an underutilized energy efficiency resource. We’ve only scratched the surface of its potential to save energy. Decades of research and thousands of retrofits show that even the most basic home retrofits can cut energy use by 15-20% while more comprehensive retrofit projects can double or even triple the energy savings. Residents benefit not only from lower energy bills, but also from improved comfort, better health, and safer, more durable homes. Despite the widely-documented benefits of whole home retrofits, demand for retrofits lags.

Approximately 518,000 retrofit projects were completed through the Home Performance with ENERGY STAR program from 2002-2015, according to DOE.  Add to that the roughly 115,000 homes retrofit through the Better Buildings Neighborhood Program and the total number of home performance retrofits completed through the leading program efforts approaches 700,000—less than 1% of US single-family homes. While this number doesn’t include retrofits completed outside of programs or those conducted through weatherization efforts targeted to low- and moderate-income households, it does illustrate the need to scale up retrofit activity to capture the energy savings available.  

How to meet challenges and expand retrofits

Our new report explores some of the lingering challenges facing residential retrofit programs as well as strategies for growing participation while delivering anticipated savings. We include examples of current programs that use these strategies for better results.  Specific challenges include: (1) calculating accurate project-level savings estimates, (2) ensuring that upgrades are installed and perform as expected, and (3) encouraging public buy-in and participation in programs. All of these factors affect a program’s ability to realize savings.

New technologies, practices, and program features represent opportunities to improve outcomes.  Already gaining traction in retrofit programs are data standardization, calibration of energy models to actual energy use, and real-time program evaluation---all strategies that help improve project-level realization rates. Emerging opportunities include leveraging the capabilities of smart technologies (e.g., smart thermostats and home energy management systems), expanded focus on HVAC system measurement and verification, and potentially, the inclusion of pay-for-performance incentives.

Programs can play an important role in growing consumer demand for home performance work. They can improve systems and practices that enable contractors to perform quality work and, at the same, boost energy savings. More accurate, reliable realization of savings at the project level opens up more opportunities to use financing strategies that are tied to energy savings, such as pay-as-you-save or on-bill financing. This can also enable better integration of energy efficiency improvements with other home maintenance and renovation projects, such as roofing or siding replacement. By seizing these opportunities, retrofit program providers can help residents gain all benefits of more energy-efficient homes.