Decarbonization and Consumer Costs Expected to Drive Future Investments in Efficient Buildings

June 15, 2022

What will drive building investments in energy efficiency over the next 10 years? To find out, Lawrence Berkeley National Laboratory researchers reviewed academic literature, analyzed recent state actions on demand-side management, and interviewed and surveyed experts throughout the country.

A slide-deck report, Future of Energy Efficiency in Buildings: Drivers and Market Expectations, summarizes identified drivers and insights about likely future attributes of building efficiency markets. The report is geared toward policy makers, utility regulators, utilities, the energy efficiency industry, and other stakeholders.

Register here for a free webinar on the report on June 30, 2022, 11:00 AM-12:00 PM Pacific.

Following opening remarks by David Nemtzow, Senior Advisor for the U.S. Department of Energy's Loan Programs Office, lead author Steven R. Schiller will highlight research findings and moderate a panel discussion to get reactions to the report's findings with:

  • Jennifer Chamberlin, Executive Director, Market Development at CPower
  • Andrew deLaski, Executive Director, Appliance Standards Awareness Project
  • Chandra Farley, CEO, ReSolve
  • Commissioner Megan Gilman, Colorado Public Utilities Commission
  • Mary Ann Piette, Director, Berkeley Lab Building Technology and Urban Systems Division
  • Kenneth Shiver, Chief Economist and Director of Planning, Regulatory & Strategy Support, Southern Company

Berkeley Lab researchers found that the most important drivers for efficiency investments in buildings are (1) public policies and regulations, particularly related to decarbonization, and (2) the cost of energy, relative to the cost of energy efficiency. Other important drivers are efficiency technologies, economic conditions, societal priorities, and business practices of utilities and other efficiency service providers (see graphic). 

Drivers of Energy Efficiency in Buildings

Among predictions in the report for the next 10 years:

  • Some efficiency technologies like heat pumps and building shell measures, as well as technologies that support efficiency — for example, by providing data access and artificial intelligence — are primed for significant performance improvements. On the other hand, efficiency improvements will not advance as fast as historic rates for lighting and conventional heating systems.
  • Electric efficiency actions will become more focused on demand flexibility and energy use reductions during specific times through controls and integration with other distributed energy resources in grid-interactive efficient buildings and communities. 
  • Efficiency will be an important resource for meeting state decarbonization goals.
  • Marketing of efficient products and services will increasingly focus on grid services, decarbonization, integrating distributed energy resources, non-energy benefits for consumers, and Environmental, Social and Governance criteria for investors. 
  • Public investment in energy efficiency will increase in historically underserved, disadvantaged communities in recognition of its social, health, and safety benefits and to redress historical underserving of energy needs of these communities.
  • While state actions will vary, overall state and local governments will increase efficiency goals. Research findings point toward low-to-moderate national growth in efficiency-based energy savings. However, to the extent that public policy mandates ramp up requirements with respect to carbon reductions, researchers expect moderate to high growth in efficiency-based impacts.

Report authors are Steven R. Schiller, Jeff Deason, Kelly Parmenter, Greg Leventis, and Lisa Schwartz, Berkeley Lab. The U.S. Department of Energy's Building Technologies Office funded this work. Other Berkeley Lab reports on energy efficiency and demand flexibility are available at https://emp.lbl.gov/research/energy-efficiency.

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