Policy recommendations for utilities and regulators.
The authors are each engaged at Cadmus Group, which provides a full spectrum of energy services, covering energy efficiency planning, design, and evaluation, and market transformation. M. Sami Khawaja, Ph.D., serves as an executive consultant in the consultancy’s energy services division. Senior vice president Hossein Haeri, Ph.D., leads the division, while Brian Hedman is an executive director at Cadmus.
Much of the potential for energy efficiency in the United States remains untapped, owing in large part to a wide divergence of views over analytic and political constructs.
To break the logjam and optimize this potential, we must, quite simply, start thinking about energy efficiency as a resource - not unlike fossil fuels or renewable generation, and even if it cannot be metered.
An optimal energy system is a mix of supply- and demand-side resources. Pursuing a strategy that contains a least-cost mix of these resources will produce a cost-effective, reliable, and environmentally responsible portfolio. However, that will also require a policy and regulatory structure that allows utilities to be indifferent between supply- and demand-side options for meeting resource needs.
As a resource, energy efficiency offers several advantages. It lowers costs, reduces fuel price risk, improves system reliability and energy security, creates jobs through direct and induced impacts, and offers a number of co-benefits such as increased property values. Perhaps the most important reason for pursuing energy efficiency is the reduction in greenhouse gases. Investing in energy-efficiency measures is cheaper per ton of carbon dioxide avoided than any other emission reduction alternative.
Despite its abundant benefits, current energy-efficiency policies and analytical frameworks have been punitive to energy efficiency in three fundamental areas: