ACEEE Blog

Commission staff proposal would encroach on Arizonans’ freedom to choose how they use energy
November 10, 2014 - 3:14 pm

By Annie Gilleo, State Policy Manager


Voters made many decisions on Election Day. Governors were chosen and new laws were adopted. But one choice Arizona voters didn’t get to make may raise utility costs for families and businesses in the state. On November 4th, while Arizona voters were focused on exit polls and election results, the Arizona Corporation Commission (ACC) staff quietly released a proposal for new energy efficiency rules that would eliminate the state’s ambitious electricity and natural gas savings standards.

The proposed rules would be a major step backward for the state. In recent years, Arizona has staked a place as an energy efficiency leader in the Southwest. The state saved more energy than any other state in the region in 2013. In fact, the nearly 1.75% electricity savings Arizona achieved was fourth highest in the country. Arizona has reached these high levels of savings for utility customers as a direct result of its energy efficiency standards, which were established in 2010 by a unanimous and bipartisan ACC decision. Since then, Arizona has climbed from the 29th to the 15th most energy efficient state in the country, with electricity savings more than doubling. Doing away with these energy savings requirements would be costly to utility customers in the state.

According to the Southwest Energy Efficiency Project (SWEEP), the standards have saved Arizona consumers and businesses more than $540 million in just three years. These programs, through measures like lighting and equipment upgrades, help homeowners improve the efficiency of their homes and businesses cut waste. Without these strong standards to guide the utilities, investments in efficiency would likely drop significantly, leaving customers with higher energy bills and fewer resources available to help them become more efficient.

It’s also important to note that utilities have been spending wisely on efficiency. The current rules require utilities to invest only in efficiency that is cost effective. That means that every dollar that goes into efficiency programs must save customers far more. In fact, energy efficiency programs are the least-cost option available to utilities to meet demand. So why roll back the efficiency rules now?

Even former commissioners can’t quite see the logic. In a recent article in AZ Central, former ACC chairwoman Kris Mayes called the proposal “crazy.” Mayes went on to say that “nothing in the record suggests the standard is not working.” Others share Mayes’ indignation. Efficiency advocates worked hard this week to make sure that Arizonans recognize the importance of the state’s energy efficiency targets. Just two days after the ACC issued its proposal, a group of advocates filed comments pointing to analysis by the Lawrence Berkeley National Laboratory that found that the efficiency standard would produce $9 billion in bill savings for Arizona customers by 2030.

Things are moving quickly in Arizona. Comments on the ACC staff proposal are due November 18th. For those interested in commenting on the issue, SWEEP has additional information, including directions for commenting, posted on their website.

Arizonans have a choice. They can move backwards, using more energy and paying higher bills, or they can move forward with incentives that encourage everyone in the state to use energy smarter. Utilities can continue to partner with their customers to help them take control of how and when they use energy or, pushed backwards by the proposal, they can take on the one-dimensional role of bill collectors. There’s plenty of proof that Arizona’s efficiency goals are working well for customers in the state. The ACC proposal is a step—no, a giant leap—in the wrong direction.


We can’t have water without energy, but how much energy do we need?
November 05, 2014 - 11:56 am

By Rachel Young, Senior Research Analyst, National Policy


Let’s have a conversation about water and energy. We know that the two resources are connected: We need water to produce electricity, mostly for thermal power plants (though we are going to put that aside today). We need energy to pump water out of the ground, treat it so it is potable, and then re-treat it after we use it to shower or wash clothes. We also need energy to heat water in our homes, businesses, and industrial facilities. Recognizing these intersections opens up opportunities for utilities and businesses to save more energy and conserve more water, while helping policymakers and regulators design more strategic and cross-cutting policies.

How much energy does it take to get water from the ground, or a lake, or a mountain, to your house? And, after it goes down the drain, how much energy does it take to process that water so it can go back to your house, or back to its source? Well, as with most things, the answer is complicated. ACEEE has taken a stab at gathering some of the relevant literature and studies to get an idea of what the answer to that question is. In our new paper, Watts in a Drop of Water: Savings at the Water-Energy Nexuswe attempt to estimate the amount of energy required to move and treat water.

The ranges of water’s energy intensity vary dramatically, particularly in the water service sector (source, conveyance, and treatment). This is largely due to differences in size of the water systems, pumping requirements between geographic locations, and raw water characteristics. The chart below shows the ranges we gathered for the water system (excluding heating water in the home).

What is the biggest finding? There’s a big opportunity for savings and a lot more work needed to achieve them. We need more raw data on the energy use by water and wastewater facilities across the country. Once there is more data we need solid methods to calculate energy savings from water conservation. If utilities want to work together with regulators to save energy through water, we need good methods for calculating those savings. We need pioneers. We need water and energy utilities working together to do innovative collaborative work across the country. We need to gather stories of success. Putting those pieces in place means a lot of work needs to happen, but the benefits, particularly in states facing severe droughts, would be huge. So let’s get moving!

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A tale of a poorly designed program and overly judgmental evaluators
November 04, 2014 - 9:47 am

By Steven Nadel , Executive Director


The E2e project released a working paper recently that evaluates the State Energy Efficient Appliance Rebate Program (SEEARP), funded in 2009 by the American Recovery and Reinvestment Act. In the paper, authors Sebastien Houde and Joseph Aldy find that the SEEARP program provided little economic stimulation or energy savings. These results are not surprising, given problems with the design of the program (points that ACEEE made when states were crafting their versions of the program). However, Houde and Aldy’s conclusion that incentive programs as a class are costly and ineffective is an unjustified case of guilt by association.

Houde and Aldy examined sales of three appliances (refrigerators, clothes washers, and dishwashers) that accounted for 65% of SEEARP expenditures. So their conclusions apply only to those products and not to others, such as water heaters, furnaces, air conditioners, and heat pumps, which were included in some state programs.

The appliances included in their study represent major purchases and small incentives (Houde and Aldy find that incentives averaged 12-15% of product cost); too small to spur large numbers of consumers to make major purchases they were not planning to make, particularly during a recession. Not surprisingly, Houde and Aldy find that most program participants were planning to buy an appliance anyway, and they estimate that appliance sales increased only 1-2% above what would be expected absent the program. The appliances that Houde and Aldy didn’t consider had eligibility levels that were often set more stringently, reducing free riders.

Eligibility levels under the program were based on ENERGY STAR®. For the three appliances examined by Houde and Aldy, ENERGY STAR market share was very high (46-75% of sales prior to the program), and thus “free rider” levels would be expected to be very high. Free riders are consumers who took a rebate, but would have purchased an ENERGY STAR appliance even if the program were not offered. Houde and Aldy estimate that free riders were 73-92% of program participants. Free riders do not contribute to energy savings relative to business-as-usual, so when free riders are very high, energy savings are usually low, which Houde and Aldy confirm. ACEEE generally recommends that rebate program eligibility be limited to only the most efficient products with limited current market share (e.g. typically less than 15%), to help keep free riders down.

The ENERGY STAR market share for products not examined by Houde and Aldy was generally lower, so we would expect that portion of SEEARP to perform at least somewhat better than for the three appliances they examine. Still, the bottom line is the program could have been designed much better.

Rather than limit their findings to a tale of one poorly designed program, the authors use their results to impugn incentive programs more broadly, and declare that their findings “add to the growing body of evidence suggesting that energy efficiency subsidies tend to have a high cost to society due to various unintended consequences.” They also seem to go out of their way to find such unintended consequences. For example, they discuss how rebates can lead consumers to purchase larger appliances that use more energy and therefore reduce the energy saved.

If you look at the details in their own paper, though, you’ll find that ENERGY STAR models increased in size by less than 1%. Such small changes do not support their extensive discussion on this alleged problem. Finally, Houde and Aldy miss an opportunity to tell us how to design better rebate programs. They note how energy savings were greater in some states than others, but do not explore why that is the case so we all might learn from that finding. The only glimmer they provide is to note that generally higher rebates resulted in higher energy savings, that providing rebates as a percent of purchase price (instead of a fixed rebate) reduced energy savings, and that eligibility levels stricter than ENERGY STAR increased energy savings for some products. Good evaluations should tell us how we can do better, not argue for ideas that are poorly supported by the evidence.

For one example of how incentive programs can be successful, take a look at the Northwest Energy Efficiency Alliance’s (NEEA) efforts to promote more efficient clothes washers. NEEA succeeded in raising the market share of eligible clothes washers from 2% to more than 20%, ultimately influencing ENERGY STAR specifications and federal minimum efficiency standards.


The Rebound Effect – Mountain or Molehill?
October 30, 2014 - 4:07 pm

By Steven Nadel , Executive Director


Every few years, a new paper comes out about the rebound effect and the issue receives some short-term attention. (When a consumer or business buys an efficient car or air conditioner, they may use their energy-efficient equipment a little more often or may spend some of their energy bill savings on things that use energy—these are examples of rebound effects.) ACEEE wrote a paper on the rebound effect in 2012, concluding that both direct and indirect rebound effects exist, but they tend to be modest. Overall, we found that rebound may average about 20%, meaning that 80% of the savings from energy efficiency programs and policies register in terms of reduced energy use, while the 20% rebound contributes to increased consumer amenities (for example, more comfortable homes) as well as to a larger economy.

Recently, E2e and the Breakthrough Institute each published a new paper about rebound. E2e’s work is largely consistent with what we’ve written, while Breakthrough’s paper alleges that the rebound effect is much larger than most other research has found. In order to contribute to the ongoing dialog on this issue, this blog post briefly summarizes the findings of both papers and then critiques the Breakthrough work.

E2e, a joint initiative of three universities, released a working paper entitled “The Rebound Effect and Energy Efficiency Policy.” In it, they discuss various types of rebound and ways to analyze it. Much of their data relates to gasoline and oil prices and consumer and market responses to changes in those prices. They find that for developed countries, “most… studies fall […] in the range of 5 to 25 percent” direct rebound effect (where direct captures consumer response but not whole-economy effects). In developing countries, where incomes are lower and impose constraints on miles driven and other energy-consuming behavior, the E2e paper finds the “most common range” is 10-40% demand elasticity (related to but not exactly the same as direct rebound). They also discuss macroeconomic effects, emphasizing studies that show rebound of 11 percent and 21 percent due to economic growth. By way of comparison, the ACEEE paper estimates 10 percent direct rebound on average for the United States, noting the first of the two economic growth studies. In addition, in the case of oil prices, the E2e paper discusses how improvements in fuel economy soften oil prices, which can lead to a 20-30% increase in global oil use due to these price effects. Bottom line: The E2e paper sees modestly higher rebound effects than the earlier ACEEE paper.

The new Breakthrough paper, on the other hand, continues the institute’s longstanding view that rebound effects are very large and often result in “backfire,” meaning that rebound is larger than the efficiency savings and therefore energy use increases rather than decreases. The latest Breakthrough paper discusses three historic case studies, involving lighting efficiency trends over centuries, and improvements in electricity generation and steel production over decades.

Regarding lighting, they rely on work by Fouquet and Pearson that shows that in the 1800s lighting energy use grew much faster than incomes as society switched from low-efficiency candles to higher efficiency kerosene and gas lamps. Breakthrough uses this period as evidence for backfire but does not discuss how in the 1900s, as electric lighting became predominant, Fouquet and Pearson find that lighting energy use increased much more slowly than incomes increased, finding that after 1900, “rebound effects in the lighting market were still strong, although they do not suggest backfire.” Much has changed since the 1800s and the lack of more recent evidence shows how tortured the Breakthrough analysis is.

Regarding electricity use, Breakthrough discusses how electricity use has risen more quickly than generating plant efficiency has increased. The authors call this backfire, even as they acknowledge that these trends are also affected by rising incomes, urbanization, changes in consumer preferences, and other socioeconomic and demographic trends. They provide no evidence on the relative importance of energy efficiency relative to these other factors. Furthermore, they seem to mix up energy efficiency and economic efficiency. They focus on the period of 1900-1950 in the United States, when electricity use per capita increased 30 times, while residential prices decreased about 95% in real terms. These price decreases are substantially greater than the energy efficiency improvements, indicating improved economic efficiency, such as economies of scale. Economic efficiency also explains a good portion of the steep declines in the price of lighting and appliances that contributed to rising electricity use. In other words, a large portion of the increase in electricity use was due to improvements in economic efficiency that go beyond the technological energy efficiency improvements.

In the case of iron and steel, the authors appear to mix up energy and economic efficiency again. To provide just one example, they discuss China’s large increase in energy use for steel production, and do not address how much of this may be due to energy efficiency as differentiated from many broader changes that are profoundly affecting the Chinese economy.

Breakthrough released their new report with an op-ed in the New York Times. The op-ed goes several steps further than the report. First, applying its claims of lighting backfire from the 1800s, it claims that LED lighting, for which the most recent Nobel Prize in physics was awarded, will increase lighting energy use, particularly in developing countries. As I wrote in a letter to the editor of the Times, LEDs are about six times more efficient than incandescent lamps, so in order to reach the backfire point, the average purchaser would need to increase the amount of lighting they use by a factor of six. While such an increase may well happen among the poorest households in developing countries, it is unlikely to be seen in developed countries, or even among the middle class in developing countries.

The Breakthrough op-ed also claims that the International Energy Agency and the Intergovernmental Panel on Climate Change find that “rebound could be over 50 percent globally.” While technically correct, their claim takes the upper end of the ranges found in recent IEA and IPCC studies. For example, IEA states, “Direct rebound can range from 0% to as much as 65%. However, estimates tend to converge between 10% and 30%.” It would be much more accurate if the institute would cite the full range, instead of looking only at the extreme. Applying that logic, I could argue that IEA supports ACEEE’s 10% direct rebound estimate--at least 10% is within IEA’s most likely range of 10-30%. IPCC estimates get similar treatment from Breakthrough.

Bottom line: The E2e analysis is very reasonable, but Breakthrough appears to be more interested in exaggerating to make its case, rather than sticking to the facts. The truth is that for 40 years energy efficiency has had a dramatic effect on worldwide energy consumption. In the United States, if we were to use energy today at the rate we were in 1974, we would be consuming more than twice the amount that we are actually using.

Energy Intensity Declines Due to Efficiency Gains

Source: Updated from ACEEE using data from U.S. EIA & U.S. Census data

And when you add the fact that these savings also have positive economic effects, such as creating jobs and protecting the environment, it’s easy to see why energy efficiency has received bipartisan support in every major energy bill since the 1970s—it works.


Grabbing the dollars on the ground by opting in to energy efficiency
October 30, 2014 - 11:22 am

By Anna Chittum, Visiting Fellow, Industry


We’ve heard a lot lately about some large energy-using customers like large factories and retail chains seeking to opt out of energy efficiency programs. But what about the states and utility service territories where these customers are opting-in instead? It’s happening. It turns out that when efficiency programs are done right, customers are clamoring to participate.

Even though energy efficiency investments are highly cost effective and offer tremendous additional benefits, making such investments does not come naturally to some business owners. There are many reasons for this, but a critical barrier is that some companies lack the internal resources to identify efficiency investments. Companies may also find that even if a highly cost-effective efficiency opportunity is found, the return on investment is insufficient to satisfy their internal requirements. Savings are left on the table.

We know that savings are left unrealized because when customers opt out of energy efficiency programs and claim that they’ve made all cost-effective investments, those programs are still able to find cost-effective savings opportunities at the company’s site. Energy efficiency programs can provide access to technical expertise to identify a wide variety of savings opportunities, and greater flexibility in determining what constitutes a cost-effective project.

Large energy users around the country are benefitting from participation in their local energy efficiency programs. Some are even choosing to opt in to optional programs because of the value they provide. In addition to energy savings, companies can take advantage of the longer payback period allowed within energy efficiency programs to make additional cost-cutting investments they wouldn’t otherwise make. These programs also help companies work with technical experts they wouldn’t otherwise have access to and learn best practices from other facilities facing similar challenges.

Companies opting in to energy efficiency programs know this. They get to enjoy financial incentives to make the investments they’d like to make but wouldn’t be able to on their own. Let’s look at a few examples from states across the country:

In Oregon’s Portland General Electric and PacifiCorp territories, only 20% of the large industrial facilities that can self-direct choose to do so. The remaining 80% have experienced the benefits of participating in the efficiency programs offered by the Energy Trust of Oregon. The companies have recognized that, absent participation in these programs, their energy efficiency opportunities would not be identified and pursued. No newly eligible industrial companies have chosen to self-direct their efficiency efforts in the past 6½ years. Instead, they have increasingly found the value of program participation to far outweigh the cost.

In New Jersey, an “opt-in” program administered by the New Jersey Clean Energy Program has seen more demand than spaces available since its inception in 2011. What makes the program so attractive? For starters, projects with payback periods of up to 8 years can earn incentives, which themselves can range up to 75% of project cost. Participants develop long-term energy savings plans and are awarded incentives based on the development and implementation of the plan. They can then coordinate energy efficiency investments with other capital investments, and projects that wouldn’t otherwise be pursued (due to longer payback periods) are greenlighted.

In Michigan, 77 commercial and industrial customers initially chose to opt out of traditional efficiency programming and self-direct their funds when first presented with the option. Over the next few years, 30 chose to opt back in to the energy efficiency programs offered by their utilities once they saw the many benefits of participation.

Energy efficiency programs give customers more control over their future energy bills, and access to a wide body of technical knowledge developed as programs log years and years of customer engagement. Today, well-informed large energy users are choosing to opt in to this wealth of incentives and knowledge in order to grab (and keep!) the dollars they would have otherwise left on the ground.


By the numbers: A 2014 State Energy Efficiency Scorecard preview
October 16, 2014 - 5:25 pm

By Annie Gilleo, State Policy Manager


We spend a lot of time here at ACEEE with numbers. We calculate energy savings, efficiency investments, and jobs. Even with all this data at our fingertips, though, I’m always most curious to see the numbers we produce every fall in the State Energy Efficiency Scorecard. This will be the eighth year we’ve ranked states on their adoption of policies that encourage energy efficiency, and while some results are easy to predict, there are always a few surprises. As the launch of the 2014 State Energy Efficiency Scorecard draws near, here are just a few numbers to whet your appetite:

51: Number of “states” we rank in the State Scorecard. Thought there were only 50 states in the U.S.? Well you’re right, but we include the District of Columbia too!

3: Number of U.S. territories scored in the 2014 State Scorecard. For the first time, we’ve worked with our contacts in Guam, Puerto Rico, and the U.S. Virgin Islands to bring you up-to-date information on their energy efficiency initiatives.

31: Number of metrics we assess to generate state scores. These metrics span seven policy areas and cover everything from goals to reduce vehicle miles travelled to incentives for combined heat and power projects to targets for utility energy savings.

50: Points possible in the 2014 State Energy Efficiency Scorecard. Spoiler: No state achieved a perfect score this year, but some came close!

92: Response rate to our requests for data. We sent a total of 108 requests to state energy offices and public utility commissions. This year, we received more feedback than ever before.

16: Number of states that rose in the rankings this year. We were happy to see the regional diversity of states moving up the rankings, proving that energy efficiency has been embraced across the country.

Of course, there are a few numbers we’re not revealing just yet. Curious how your state ranks in the 2014 State Energy Efficiency Scorecard? Here’s one last number to remember:

5: Number of days until the State Scorecard is released! Follow our Twitter account, @ACEEEdc, for breaking Scorecard news and check our Scorecard landing page on October 22nd for state scores and ranks, as well as the full report and state score sheets that break down our scoring for each state.


By the numbers: A 2014 State Energy Efficiency Scorecard preview
October 16, 2014 - 5:25 pm

By Annie Gilleo, State Policy Manager


We spend a lot of time here at ACEEE with numbers. We calculate energy savings, efficiency investments, and jobs. Even with all this data at our fingertips, though, I’m always most curious to see the numbers we produce every fall in the State Energy Efficiency Scorecard. This will be the eighth year we’ve ranked states on their adoption of policies that encourage energy efficiency, and while some results are easy to predict, there are always a few surprises. As the launch of the 2014 State Energy Efficiency Scorecard draws near, here are just a few numbers to whet your appetite:

51: Number of “states” we rank in the State Scorecard. Thought there were only 50 states in the U.S.? Well you’re right, but we include the District of Columbia too!

3: Number of U.S. territories scored in the 2014 State Scorecard. For the first time, we’ve worked with our contacts in Guam, Puerto Rico, and the U.S. Virgin Islands to bring you up-to-date information on their energy efficiency initiatives.

31: Number of metrics we assess to generate state scores. These metrics span seven policy areas and cover everything from goals to reduce vehicle miles travelled to incentives for combined heat and power projects to targets for utility energy savings.

50: Points possible in the 2014 State Energy Efficiency Scorecard. Spoiler: No state achieved a perfect score this year, but some came close!

92: Response rate to our requests for data. We sent a total of 108 requests to state energy offices and public utility commissions. This year, we received more feedback than ever before.

16: Number of states that rose in the rankings this year. We were happy to see the regional diversity of states moving up the rankings, proving that energy efficiency has been embraced across the country.

Of course, there are a few numbers we’re not revealing just yet. Curious how your state ranks in the 2014 State Energy Efficiency Scorecard? Here’s one last number to remember:

5: Number of days until the State Scorecard is released! Follow our Twitter account, @ACEEEdc, for breaking Scorecard news and check our Scorecard landing page on October 22nd for state scores and ranks, as well as the full report and state score sheets that break down our scoring for each state.


Tribute to Art Rosenfeld: our founder, leader, mentor, and friend
October 08, 2014 - 3:28 pm

By Glee Murray, Senior Director for Outreach


Anniversaries serve to remind us where we’ve come from, how much we’ve accomplished, and where we’re headed. What better way to launch ACEEE’s 35th anniversary as an organization (coming up in 2015) than by paying tribute to Dr. Arthur Rosenfeld, who was instrumental in our creation and guides our vision still? Art is our founder and is currently distinguished scientist emeritus at Lawrence Berkeley National Laboratory and professor emeritus of physics, University of California, Berkeley.

We asked seven leaders in the energy efficiency community to help us make a video honoring Art at our recent Summer Study on Energy Efficiency in Buildings. The stories they told and the history they shared with the sold-out crowd inspired Art to deliver an impromptu remembrance to “1,000 of his closest friends,” as he put it. He recalled the pivotal point in his career when he shifted from high-energy physics to developing the field that became energy efficiency. And, yes, his mesmerizing present-at-the creation story about the origin of ACEEE involved Jimmy Carter and that dang sweater!

We are indebted to these seven energy efficiency luminaries for sharing their memories and heartfelt thoughts about Art in the tribute video:

Many thanks to all of you. And thanks to everyone who participated in this year’s Buildings Summer Study, the biggest in our history, for making it so successful.

See you in 2016!


The time has come for our first Intelligent Efficiency Conference
October 08, 2014 - 10:00 am

By Ethan Rogers , Program Director, Industry


Efficiency has become intelligent. We’ve always known that waste is stupid and that efficiency is smart, but now, many energy measures can learn, adapt, and self-optimize. It’s called “intelligent efficiency,” and it’s going to transform how energy efficiency is provided, achieved, and measured. We’re so excited about its potential that we are hosting an entirely new conference on the subject in November. The first ACEEE Intelligent Efficiency Conference will be held on November 16 - 18, at the Hyatt Regency – Embarcadero, San Francisco. Speakers will include experts and thought leaders from the information and communication technologies (ICT), energy efficiency, utility, and end-user communities. We’re expecting this to be a big ICT-energy efficiency matchmaking event that will facilitate intelligent efficiency going mainstream!

If you’d like to learn more about intelligent efficiency and our conference, we are hosting a webinar on October 21st. In this webinar, Chris Hankin of the Information Technology Industry Council (ITI) will moderate a panel comprised of Indy Ratnathicam, marketing and strategy director for FirstFuel, Jeff Kramer, executive director of strategic alliances and public policy for Verizon, and me. We’ll talk about how intelligent efficiency is going to transform energy use in buildings, communities, transportation systems, and factories.

You can also learn more about intelligent efficiency through our reports and those by others covering this space. Our first report, A Defining Framework for Intelligent Efficiency, examined the scope and purpose of intelligent efficiency. The second one, Intelligent Efficiency: Opportunities, Barriers, and Solutions, examined the economic benefits in the commercial and manufacturing sectors. Earlier this year, ACEEE transportation program director Therese Langer published Smart Freight: Applications of Information and Communications Technologies to Freight Systems , which examines intelligent efficiency in moving freight. And this summer I finished a ten-month deep dive into how smart manufacturing saves energy with The Energy Savings of Smart Manufacturing report. Steven Lacey of Greentech media, who has also covered this issue extensively, released a report called Intelligent Efficiency: Innovations Reshaping the Energy Efficiency Market last summer. By the way, he’s bringing the Energy Gang to our conference and will be taping a podcast as part of our lunch presentation.

For more information on the webinar, visit: http://www.aceee.org/conferences/2014/ie/webinar

To register for the Intelligent Efficiency Conference in San Francisco next month, visit: http://aceee.org/conferences/2014/ie/registration


Better information will transform energy use in multifamily buildings
September 30, 2014 - 2:16 pm

By Lauren Ross, Manager, Local Policy


When ACEEE launched the Multifamily Energy Savings Project two years ago, we offered one of the first estimates of potential energy savings – $3.4 billion – for multifamily buildings, a traditionally underserved market. Since then, we continue to report on opportunities and challenges for achieving these savings. Recently, there’ve been a few major wins for the multifamily community that are expected to make it easier for building owners and financiers to make investments in energy efficiency.

Last month, Fannie Mae released the first nationally representative sample of energy and water data for multifamily properties across the United States. The Multifamily Energy and Water Market Research Survey provides an insight into multifamily buildings’ annual spending on energy and water as well as other important trends and metrics. The report also responds to the lack of information on energy use in submarkets in the multifamily sector by providing separate breakdowns for affordable and market-rate units, tenant and owner-paid utility bills, and by building size and other important building features.

The report also reinforces what many have speculated in recent years – the multifamily sector remains an untapped opportunity for energy efficiency. According to the survey results, the least efficient buildings might be spending upwards of $165,000 more per building in annual energy costs than comparable buildings operating at a much higher efficiency.

In addition to providing the most comprehensive, national multifamily energy and water use data to date, the survey also serves as the basis for the long-anticipated EPA ENERGY STAR® score for multifamily buildings . The 1 - 100 ENERGY STAR score is a simple way for multifamily building owners to understand their property’s energy performance over time, compared to its peers. This information can also be made available to tenants who are interested in the energy efficiency of their building or prospective tenants.

Proponents for the multifamily ENERGY STAR score expect to see the kind of benefits that have been demonstrated in commercial and industrial buildings. The single score for these buildings, introduced in 1992, is responsible for helping thousands of building owners assess their building’s energy performance and identify ways to save energy, according to the EPA. That’s resulted in over $230 billion in savings on utility bills and preventing more than 1.8 billion metric tons of greenhouse gas emissions.

While Fannie Mae’s recent developments give multifamily building owners information to identify opportunities for reducing energy costs, it’s not enough. Complimentary efforts are needed to ensure the owners have resources, like utility incentives and financing, to support capital investments for improved efficiency. ACEEE’s Multifamily Utility Working Group supports this effort by engaging over 30 utilities around the country to improve or expand their multifamily programs. Our report, Apartment Hunters: Programs Searching for Energy Savings in Multifamily Buildings, provides 10 best practices for designing and implementing successful multifamily programs while addressing common challenges and opportunities for cost-effective energy savings in the multifamily sector.

This December, ACEEE and Energi Insurance Services will also be hosting a special multifamily convening of its Small Lender Energy Efficiency Community (SLEEC), a community of small to mid-size lenders with an interest in participating in the market for energy efficiency investments. This engagement will build on ACEEE’s previous work to assess lender needs for participation, particularly in traditionally underserved markets. There will be a particular focus on the potential roles of technical assistance, policy, research, and private sector product development. We will be highlighting our efforts in building and developing this community and resources for lenders in a future blog post.

We have come a long way in terms of learning more about energy use and trends in this market and recent developments indicate continued success in reaching multifamily customers. Fannie Mae’s efforts, as well as the work of others, like the peer-exchange communities convened by ACEEE, are helping to collect, analyze, and share the information needed to transform the way multifamily buildings use energy.