States and Utilities Leading on Industrial Energy Efficiency Programs

April 5, 2012

Programs Spending Over $1 Billion Annually

Washington, D.C.—States and utilities invested over $811 million in industrial energy efficiency programs in 2010, far exceeding the spending by the federal government and other national-level programs. Nationwide, all industrial energy efficiency programs spent well over $1.1 billion in 2010, according to a new report, Money Well Spent: Industrial Energy Efficiency Program Spending in 2010, released today by the American Council for an Energy-Efficient Economy (ACEEE).

The report details a first-time ever estimate of total industrial energy efficiency deployment and technical assistance at the federal, state, and utility levels. States and utilities were responsible for about two-thirds of all industrial energy efficiency program spending in 2010, reflecting a strong prioritization of industrial energy efficiency by certain state lawmakers and regulators.

“Industrial energy efficiency is one of the cheapest, most cost-effective efficiency resources available to us today according to ACEEE research,” said Anna Chittum, lead author of the report and Senior Analyst at ACEEE. “As a country, our states are putting significant resources toward capturing industrial efficiency, but they have still only harnessed a fraction of the potential.”

The study captures annual spending by a wide variety of state and utility programs across the country, including utilities and ratepayer-funded public benefit fund organizations, state agencies, public universities, nonprofit organizations, and locally-administered federal programs.

“Our research shows that utilities and public benefit fund organizations are already playing a major role in realizing industrial energy efficiency opportunities,” said Seth Nowak, co-author of the report and Senior Analyst at ACEEE.

Industrial energy efficiency program spending varied considerably from state to state. New York ranked first in overall industrial program spending, bolstered by strong utility spending and the significant impacts of the programs run by the New York State Energy Research and Development Authority (NYSERDA). The next five biggest spenders on industrial energy efficiency were California, Pennsylvania, Washington, Massachusetts, and Oregon.

Industrial energy efficiency program spending in 2010 was enhanced by spending at the state level as part of the American Recovery and Reinvestment Act of 2009 (ARRA), or stimulus. ACEEE’s study estimated that ARRA funding to industrial energy efficiency efforts accounted for about $228 million or 20% of the total in 2010. These funds helped to encourage the establishment of new industrial energy efficiency programs around the country, including financing and technical assistance programs that have helped jump-start a cleaner and more energy-efficient economic recovery.

Despite the short-term nature of the ARRA funds, utilities and public benefit fund organizations’ continued spending positions industrial energy efficiency in a strong place for future growth. As energy efficiency goals ramp up and efficiency becomes even more cost-effective when compared to the cost of new energy generation, the industrial sector will continue to offer opportunities for critical energy efficiency improvements that benefit all energy users. 

“States that have prioritized industrial energy efficiency are showing that they are attuned to the economic and environmental benefits of these programs, and that they value the contributions industrial sectors can make to their energy efficiency portfolios,” said R. Neal Elliott, ACEEE’s Associate Director for Research. “We anticipate that these states will increase funding in the future and be joined by others as they come to appreciate the low cost of industrial energy efficiency resources and the competitive benefits of investing in their manufacturing companies.”

To read the report, click here.

The American Council for an Energy-Efficient Economy acts as a catalyst to advance energy efficiency policies, programs, technologies, investments, and behaviors.