Cost-Effectiveness Tests: Overview of State Approaches to Account for Health and Environmental Benefits of Energy Efficiency

Topic Brief


Cassandra Kubes


The value of utility demand-side energy efficiency programs extends beyond energy savings. Yet when states evaluate cost effectiveness, they undervalue or fail to include many nonenergy benefits that accrue to utilities, participants, and society. Some of the most significant omissions are the health and environmental benefits generated by energy efficiency. This brief describes the methods and values used by 19 states that account for these key benefits, either directly by monetizing them or through proxies and other substitutes. This information is also available in a more condensed form, along with other impacts accounted for by states, at the Database for State Efficiency Screening Practices.