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Examining the Net Savings Issue: A National Survey of State Policies and Practices in the Evaluation of Ratepayer-Funded Energy Efficiency Programs


January 15, 2014

Research Report U1401

Authors:

Martin Kushler, Seth Nowak & Patti Witte

Description:

Determining the net savings impacts of a program is one of the most prominent and longstanding challenges in the utility energy efficiency field. ACEEE conducted a national review of state approaches to the net savings issue in order to help policymakers, regulators, utilities, and other interested parties better understand this issue and how their peers are addressing it. We surveyed all 50 states and the District of Columbia, reviewed recent industry literature, and conducted interviews with national energy efficiency program evaluation experts. 

The purpose of this study was not to assess or recommend particular evaluation methodologies, but to examine and document states' decision making on the issue of net savings.

The results of this project indicate a great deal of diversity in how states are approaching this issue. At one end, nearly a quarter of states simply report gross savings. Another large segment, probably a majority, nominally report net savings, but with a fairly simplistic approach (often just using deemed net-to-gross ratios). Finally, a small number of states (many profiled in this report) are pursuing more complex approaches to measuring net savings, including spillover and in some cases, broader market effects. 

The report provides a summary of our national survey results, state-by-state results on key variables, the takeaways from our interviews with national energy efficiency evaluation experts, profiles of some noteworthy states, our overall conclusions, and a few practical recommendations for how states should address various aspects related to the subject of net savings.

Click here to download the executive summary.