Economic analysis of energy efficiency programs, utility resource planning, and procurement require estimating how long energy savings last. We analyzed program-level gas and electric efficiency data reported by more than 100 utilities and other program administrators in 41 states to produce distributions of program lifetimes and active savings curves. We find that most gas and electricity savings expire within 15 years of initial program investment, with the trajectory varying by fuel and market sector. Program design and the technologies addressed by programs drive these differences. In particular, residential electricity savings decline more quickly than commercial and industrial (C&I) savings due to the expiration of behavioral and lighting measures. We also find that gas savings are longer lived than electricity savings for all sectors but C&I. Finally, we consider the relevance of active savings curves and program lifetime distributions to resource planning and assessing energy efficiency program performance.

The 2017 DOE Staff Report to the Secretary on Electricity Markets and Reliability noted a disconnect between falling wholesale electricity prices and flat or rising retail investor-owned utility (IOU) electricity prices between 2008 and 2016. This analysis sought to assess recent trends in utility costs, retail sales, and/or retail rates vis-à-vis wholesale market prices in order to help explain this disconnect. Using FERC Form 1 and ICE Power Indices data, Berkeley Lab researchers developed key annual metrics between 2007 and 2016 at a regional level for five of the seven NERC regions: Midwest Reliability Organization (MRO), Northeast Power Coordinating Council (NPCC), ReliabilityFirst Corporation (RFC), SERC Reliability Corporation (SERC), and Western Electricity Coordinating Council (WECC). The analyses of these metrics enabled Berkeley Lab researchers to arrive at the following conclusions: ~Retail and wholesale rates were increasingly disconnected across all included NERC regions; ~Reductions in wholesale electricity market prices happened concurrently with reductions in IOU fuel and purchased power (FPP) costs, but sizable regional differences in the degree of FPP cost reductions existed; ~Reductions in IOU FPP costs were offset in part by increases in non-fuel operations and maintenance (O&M) costs, but modest regional differences in the degree of these cost impacts existed; ~Reductions in IOU FPP costs were also offset in part by increases in capital expenditures, but regional differences in the magnitude and type of investments existed; and ~Reductions in retail sales tended to mitigate the effect on retail rates from reductions in total utility costs, but regional differences existed that were sometimes counterintuitive and suggest the value in a more detailed analysis of utility costs vis-à-vis general rate case filings and decisions to better understand retail rate changes over time.

Energy efficiency programs funded by utility customers provide an electricity resource in most U.S. states, but their scale and cost of saving electricity varies significantly by state. In this paper, we explore the drivers of the cost of saved electricity in these programs with an econometric model and nearly a decade of data reported by efficiency program administrators. We found strong evidence for economies of scale and weak evidence for diseconomies of scale, which suggests that states with low levels of efficiency savings relative to retail sales can increase the size of their efficiency programs without large increases to the cost of saved electricity. We discuss examples of energy efficiency forecasting and potential modeling in light our econometric analysis and identify methodological improvements relevant to utilities and grid operators. This paper provides insights into the economics of customer-funded efficiency programs that will support regulators, utilities, and policymakers to utilize energy efficiency as a resource.

We examine the energy use impacts of energy efficiency and solar PV projects financed by residential property assessed clean energy (R-PACE) programs in California. We leverage household-level interval meter data to apply normalized metered energy consumption (NMEC) methods at significant scale—more than 25,000 electric meters and more than 15,000 gas meters. We develop a comparison group to account for non-project-related changes in usage. The projects include homes that replaced existing HVAC equipment with higher-efficiency units and homes that installed central heating or air conditioning equipment for the first time. We have limited information on pre-project household equipment stock so we develop a method to infer new installations. We find that projects that installed energy efficiency technologies reduce electricity consumption by approximately 3% and gas consumption by approximately 3.5% on average. When we remove homes that installed new cooling and heating equipment for the first time, savings rise to approximately 5% for electricity and approximately 6% for gas. Given the California climate and the results of an existing study of similar California projects, these results are in line with expectations. Solar PV projects produce electricity that offsets approximately 69% of household electricity consumption on average. We estimate that California R-PACE projects installed through the end of 2019 produce annual reductions in grid-tied electricity consumption of 506 GWh (equivalent to the electricity consumption of approximately 74,000 California households) and gas consumption reductions of 2 million therms (equivalent to the gas consumption of approximately 4700 California households) in a typical weather year.

The Department of Energy funded Berkeley Lab to provide technical assistance to two municipal utilities on how energy efficiency and demand flexibility can mitigate the peak demand impacts of building and transportation electrification. Berkeley Lab worked with these utilities, Sacramento Municipal Utility District (SMUD) and Fort Collins Utilities, to identify research questions that supported their planning needs. For both utilities, Berkeley Lab developed scenario-based load forecasts that considered baseline and high-efficiency building electrification. For SMUD, the forecast also explored the sensitivity of peak demand to extreme weather (a winter cold snap) at the system-evel. For Fort Collins Utilities, the forecast addressed the impacts of low, medium, and high levels of building and transportation technology adoption on select distribution feeders. Berkeley Lab is also developing a guidance document for utilities that will draw on lessons learned from the technical assistance and provide a framework for conducting similar analyses.

This report examines the household-level energy impacts of residential property assessed clean energy (R-PACE) projects using normalized metered energy consumption methods. Our analysis covers projects that occurred through an R-PACE program between 2009 and 2017 and includes more than 25,000 electricity meters and 15,000 gas meters. We employ a comparison group, drawn from other R-PACE households with similar locational and usage characteristics whose projects were implemented at different times, to control for some non-project and non-weather factors that may impact energy use. We find that projects consisting of energy efficiency technologies save, on average, about 3% of household electricity usage and 3.5% of household gas usage. R-PACE financing, however, can be used to install central heating or air conditioning equipment for the first time. These projects would be expected to increase energy consumption. Since our data do not directly indicate which projects are new installations, we develop a simple algorithm for identifying them. Removing these inferred installation projects yields average savings of about 5% for electricity and 6% for gas for those households that remain in the sample. Given the mild California climate and the results of another study of similar California projects using similar methods, these results are in line with expectations. Solar PV projects yield large reductions in grid electricity use, averaging 69% of household consumption. We estimate that, collectively, all R-PACE projects installed in California through 2019 would generate annual reductions in grid-tied electricity consumption of 506 GWh (mostly due to solar PV) and gas consumption reductions of 2 million therms in a normal weather year. These impacts are equivalent to the electricity consumption of about 74,000 California households (including both efficiency and PV generation) and the gas consumption of about 4700 California households.

Previous research has recognized that the value of measures that reduce electricity usage depends upon the timing of the savings generated, but the lack of hourly savings shapes has limited the demonstration of this concept. We develop empirical hourly savings shapes for residential space-conditioning measures from nearly 18,000 efficiency projects in California and show how they combine with the diurnal and seasonal variation in electricity system costs. We find that these measures (cooling replacements; windows, doors, and skylights; and other envelope measures) tend to save electricity when system costs are highest and that the hourly savings account for 1.4–1.5 times as much value as non-time-sensitive estimates of efficiency would predict. We present these impact multipliers for each measure to quantify the additional value revealed by the time-sensitive approach. We show that this additional value is similar in an evolving electricity grid with storage, rather than natural gas generation, as the marginal resource.

In addition to benefiting all customers by reducing the total electric system cost, utility customer-funded energy efficiency programs provide direct benefits to the participants. Understanding the current demographic and household characteristics of participants will help assess the extent of inequities in program participation and figure out what characteristics need to be targeted to achieve equitable outcomes. This report describes how 11 demographic and household characteristics including income, race and ethnicity, and education affect participation in residential utility customer-funded energy efficiency programs. It compiles previous work on this topic and adds new primary analysis of four datasets with different levels of detail from the Residential Energy Consumption Survey (RECS), two New England states, and a Midwestern state.

Policymakers are increasingly interested in expanding access to rooftop photovoltaic systems. This study analyzes the financial performance of a Connecticut Green Bank (CGB) solar leasing program, run in partnership with PosiGen, that targets low- and moderate-income customers. We show that this program has successfully reached underserved customers and has reasonable repayment rates given the credit characteristics of the participants. The CGB/PosiGen program reaches many more underserved customers than other PV financing programs in Connecticut.For example, the majority of CGB/PosiGen participants (58%) live in census tracts that have a median income of less than 80% of the area median income (AMI). In contrast, only 9% of participants in the other CGB solar financing programs live in these census tracts. Furthermore, the majority of CGB/PosiGen participants (56%) have FICO scores that would generally be considered non-prime (<670), whereas only 2% of participants in the other programs have similarly low scores. Credit, not income, is the primary factor that explains participants’ financial performance. Overall, we find that delinquency and annualized losses are higher for PosiGen (2.3% and 0.9%) than for other CGB programs (1.4% and 0.1%). Across the CGB programs, lower credit scores are associated with higher rates of delinquency and loss. Therefore, participants’ lower credit scores explain much of the program’s higher rates of delinquency and annualized losses. PosiGen leases perform competitively with market-rate solar and non-solar leases and loans. When compared to securities backed by market-rate PV loans and leases with similar amounts of seasoning, we find that the PosiGen leases have higher delinquency rates but comparable gross loss rates. The similarity in losses is notable given that loss rates for PosiGen leases were higher than those of the other CGB leases and loans. Rather than the PosiGen leases having high loss rates, other CGB leases and loans have unusually low loss rates. We also compare PosiGen to non-solar benchmarks, including indices of auto and consumer loans. We find that the PosiGen leases have significantly less delinquency than non-prime auto loans and have performance comparable to many consumer loans. The U.S. Department of Energy’s Solar Energy Technologies Office supported this research.

We review the energy and financial outcomes of households participating in several programs based on successive versions of the Pay As You Save¯ (PAYS¯) system. PAYS¯ programs offer non-debt financing for energy efficiency (and sometimes other technologies) in residential buildings through a tariff attached to the home’s utility meter, designed to be offset by project savings. We find that the five programs we study generally serve customers living in zip codes with levels of income and education below the national average and unemployment rates above the national average, demonstrating their potential to improve equity in energy efficiency adoption. Using weather-normalized analysis of energy consumption data, we show that most customers of Midwest Energy’s program reduce annual electricity and gas consumption, averaging 15% and 26% reductions respectively. Changes in energy consumption calculated using this method represent a combination of project effects and changes in occupant behavior. These results are similar to existing analyses of PAYS¯ programs in North Carolina, Arkansas, and Tennessee. About half of participating Midwest households generate sufficient energy cost savings to cover their monthly tariff. Various factors, including changes in occupant behavior, program error, causes independent of the customer or program, or some combination thereof may explain lower-than-expected cost reductions in some projects. Given the inherent variability in annual household electricity consumption, we feel these programs are enabling energy efficiency improvements and their attendant co-benefits, including occupant health and comfort and reduced carbon emissions, while reasonably balancing energy savings and tariff costs. Pairing PAYS¯ with additional financial assistance, as well as promoting cost-effective measures such as air and duct sealing, could further broaden program participation by enabling additional projects to meet PAYS¯ program eligibility rules.