Benefits of Utility Efficiency Programs Go Beyond Direct Energy Impacts

May 27, 2020

Avoided energy and capacity costs are the primary yardstick utilities use to determine which energy efficiency programs are cost-effective for their customers. But sometimes "non-energy impacts" — not commonly recognized as directly associated with energy generation, transmission and distribution — represent substantial benefits, such as improving comfort, air quality and public health.

Considering whether and how to include non-energy impacts is an important part of cost-benefit analyses for these programs. A new report by Lawrence Berkeley National Laboratory, Applying Non-Energy Impacts from Other Jurisdictions in Cost-Benefit Analyses of Energy Efficiency Programs: Resources for States for Utility Customer-Funded Programs, offers practical considerations for deciding which non-energy impacts to include and how to apply values or methods from other jurisdictions.

Researchers reviewed studies quantifying non-energy impacts used in 30 states and applied a five-point system to indicate transferability of a value or method from each study (see table).

The report covers 16 categories of non-energy impacts:

  • Water resource costs and benefits
  • Other fuels costs and benefits
  • Avoided environmental compliance costs
  • Environmental impacts
  • Productivity
  • Health and safety 
  • Asset value
  • Energy and/or capacity price suppression effects
  • Avoided costs of compliance with Renewable Portfolio Standard requirements
  • Avoided credit and collection costs
  • Avoided ancillary services
  • Comfort
  • Economic development and job impacts
  • Public health impacts
  • Energy security impacts
  • Increased reliability

The U.S. Department of Energy’s Building Technologies Office supported this work. Report authors are Mary Sutter and Jenn Mitchell-Jackson, Grounded Research and Consulting, and Steven R. Schiller, Lisa Schwartz and Ian Hoffman, Berkeley Lab.

 

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