Library: non-energy benefits, Synapse Energy Economics, Inc.

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Best Practices in Energy Efficiency Program Screening: How to Ensure that the Value of Energy Efficiency is Properly Accounted For

Date Published: July 23, 2012     Document Type: Report
Sectors: Research, Evaluation, & Behavior

Energy efficiency is widely recognized as a low-cost, readily-available resource that offers a variety of benefits to utility customers and to society as a whole. Many states have established efficiency savings targets, some states require that energy efficiency be the first choice among resource options, and an increasing number of states require energy efficiency program administrators to pursue all cost-effective energy efficiency. As states continue to advance energy efficiency initiatives and establish increasingly aggressive savings goals, it is vitally important that best practices be used in screening energy efficiency resources for cost-effectiveness.

There is a great amount of variation across the states in the ways that energy efficiency programs are screened for cost-effectiveness. Many states are applying methodologies and assumptions that do not capture the full value of efficiency resources, leading to under-investment in this low-cost resource, and thus higher costs to utility customers and society.

The purpose of this report is to identify the best practices available for screening energy efficiency resources, in order to capture and assess the full value of those resources. Many of these best practices are based on economic theory, while others are a matter of public policy and should be based on thoughtful decisions by legislators and regulators. Our goal is to help inform those decisions.