Saving Energy Continues to Be the Best Deal in Town

By Published On: August 11, 2021

Saving a kilowatt has long been known to be the best kilowatt. Now an analysis by the Lawrence Berkeley National Laboratory of efficiency programs run by dozens of program administrators across 21 states shows just how much money was saved over nine years between 2010-2018.

The study presented Aug. 10 by four lab scientists found that “building codes and standards, residential consumer product rebates, and prescriptive and custom programs for commercial and industrial customers continue to provide the lowest cost savings.” The researchers analyzed data from up to 118 program administrators, including ones in California.  

Negawatts continue to cost less than 3 cents a kilowatt-hour. In addition, three quarters of the peak savings identified in the study cost less than $200kW. “The interesting thing here is that generation costs significantly more,” Natalie Mims Frick, with the lab’s Electricity Markets and Policy Department, said. But she added that comparisons are tricky because efficiency resources do not provide the same services as power generating technologies, which turn on and off.

Of the $36.6 billion spent between 2010-18 on conserving electricity, a little over half went to commercial and industrial  programs. Another 34% was directed to residential programs and 8% to qualifying low income programs. The latter cost was about four times higher than those in the other sectors, at an average 9 cents a kWh, lab scientist Sean Murphy said. In contrast, program administrators spent an average 2.7 cents/kWh on residential savings and 2 cents/kWh on commercial and industrial programs.

A key reason low income efficiency programs cost more is that before performing upgrades, these programs often have to deal with “issues related to the poor condition of low-income homes—which tend to be older—and health and safety issues (such as asbestos removal and old wiring) before efficiency measures can be installed,” Frick told Current.

The scientists also looked at peak demand savings from 2014-18 and found more than half, or 57%, were reaped by the commercial and industrial sectors.

Of four regions compared across the U.S.—the West, Midwest, South and Northeast—the most peak demand savings reported by program administrators were from commercial and industrial in the Northeast. In the West, peak savings from the commercial and industrial sectors were about on par with those from the residential sector.

The average cost to reduce energy use at times of high demand was $145/kWh for the commercial and industrial sector, $386/kWh for low income programs and $147/kWh for the rest of the residential sector. 

Slides courtesy of LBNL

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