AMERICAN COUNCIL FOR AN ENERGY EFFICIENT ECONOMY

The origin of utility-sector energy efficiency programs traces back to the energy crises in the 1970s, when a new concept of "energy conservation" emerged to help customers cope with soaring energy prices. Over time, this led to the development of an expanded set of customer energy efficiency programs provided by electric and natural gas utilities. ACEEE was founded during this early period — in 1980.

Since then, energy efficiency has evolved to become recognized as an integral and highly valuable element of utility investments and operations. Utility energy efficiency programs have yielded significant energy and economic benefits to the utility system and to ratepayers. Energy efficiency programs have also led to job growth in many fields, including the building trades.

Utility energy efficiency programs have expanded fairly steadily over the years, despite a temporary period of decline during the utility deregulation in the 1990s. (One enduring effect of the deregulation phase, however, is that non-utility organizations now administer and provide ratepayer-funded customer energy efficiency programs in several states.)

Now, in the 21st century, energy efficiency is regarded as an important utility system resource that can also reduce greenhouse gases, save money for customers, and generate jobs. In response to both economic concerns and climate change, legislators and regulators have supported energy efficiency at unprecedented levels.

The industry is growing rapidly. In pursuit of higher savings goals, electricity and natural gas programs are expanding their efforts and seeking new sources of savings, including behavioral change. States that did not previously engage in efficiency programs are now taking advantage of this opportunity.

Throughout this evolution, ACEEE has played a leading role in research and policy development for utility energy efficiency. We hope to maintain and build upon that leadership role.

Commercial buildings account for 19% of the energy consumed in the United States. The types of buildings that use more than two-thirds of that energy are office and retail buildings, educational and health-care buildings, and lodging. More than half the energy used by commercial buildings goes toward heating and lighting. Opportunities for commercial buildings include improving the operations and maintenance of existing buildings, and finding ways to deal with the split incentives that often occur between the bill-payers and the tenants of the building. Additionally, in many cases (particularly in schools and public buildings) capital is not always readily available for efficiency improvements.

American homes use almost 25% of the energy consumed in the United States. About 80% of that energy is used in single-family homes, 15% in multi-family homes (such as apartments and condos), and 5% in mobile homes. Although residential energy use has steadily increased over the past 25 years, it has increased at a slower rate than the rate of population increase. However, many efficiency gains are being offset by increases in the number of electronics and appliances in the average home. There are still many large opportunities for improvement, especially in areas such as whole-home performance and systems.

Understanding human behavior is critical for achieving the goals of energy efficiency. Whether we are purchasing goods, using energy to service our homes and workplaces, or responding to the constraints placed upon us by technology and systems that surround us, human behavior is the key.

Everything always comes back to behavior, even when the discussion turns upon the installation of technology: No matter how efficient the light bulb standard is, people still need to get to the hardware store, select the right bulb, take it home, install it, and use it properly before the benefits can be realized.

Behavior and the Human Dimensions of Energy Use is a growing area of interest to utilities, businesses, and governments at the federal, state, and local levels. Institutions or agencies working to promote energy efficiency benefits should incorporate a behavioral perspective to improve the reach and impact of their programs. Energy professionals can use social science to shape the ways in which programs can benefit customers and their usage of energy-derived goods and services. Specific areas in which social science is informing the work of energy efficiency are:

Going beyond information. Technology and program design should go beyond informing to directly engaging energy users in new decisions or action that reduce energy use.

Understanding context. Energy-efficient outcomes are fostered through changes in our social, natural, and built environments.

Leveraging technology. Technology enhances energy efficiency efforts by giving energy users greater control and real-time information about their energy use.

Navigating social networks. Energy efficiency is encouraged through communicating social norms, creating opportunities to compete with peers, and using trusted messengers to relay information.

Using strategic rewards. Targeted incentives and rewards increase participation and commitment to energy efficiency actions.

Raising the profile of energy. Energy must become concrete and visible to people in real-time, rather than abstract and after the fact.

Accounting for about one-third of all end-use energy in the United States, the industrial sector consumes more energy than any other sector. While industrial energy efficiency has increased steadily over the past three decades, there are still tremendous opportunities for energy savings, as well as the potential to instill the tenets of energy efficiency in a sector that employs and influences millions of people. The industrial sector, working constantly to increase shareholder value and reduce expenses, has found energy efficiency investments to be an attractive avenue to achieve those ends. As climate change awareness and mitigation strategies increase, it is likely that industry will increasingly prioritize energy efficiency as a critical solution to reducing greenhouse gas emissions.

Multiple Energy-Efficiency Events

The transportation sector consumes approximately 28% of all end-use energy in the United States. While significant advances have been made recently to improve the overall efficiency of the sector, particularly with regards to fuel economy, the opportunity for further fuel savings still exists. Technical improvements in vehicles and reasonable government policies that encourage vehicle efficiency could substantially reduce energy consumption in the transportation sector.

However, vehicle improvements will not be able to capture the full potential for energy efficiency without sound policies that slow the rate of vehicle miles traveled (VMT) across the country. VMT is expected to grow at an annual rate of 1.4%, quickly outpacing population growth in the United States. Strategies such as Pay-As-You-Drive Insurance and incentives to encourage compact, transit-oriented development are critical to achieve maximum fuel savings from transportation.

International Research, Consulting