Part of Energy Management Network »
Energy Efficiency Group
In partnership with AESP: The increasing roles of DERs, connected technology and Big Data are driving rapid change in energy efficiency. As we shape the Utility of the future, this community will help you keep up with the latest developments.
Post
Energy Efficiency: Do the Math
image credit: Photo 139764622 © Volodymyr Tverdokhlib | Dreamstime.com
As electricity prices rise, saving energy becomes more important. According to the National Energy Assistance Directors Association (NEADA), families will pay 17 percent more for home heating this winter. The average cost of home heating is projected to increase from $1,025 last winter to $1,202 this season. "These are very high prices and will not be affordable for many households," said Mark Wolfe, executive director of NEADA. To combat the cold, ratepayers do well to invest or employ energy efficiency strategies. In most cases, they will face high upfront costs, limitations of existing incentives and knowledge gaps along the way.
The initial costs of energy efficiency features can be expensive but green buildings can eliminate utility bills. Thanks to the Inflation Reduction Act of 2022, those that qualify can get a 30 percent tax credit. Consumers can do the math to see if their savings outweigh the initial costs.
Incentives can bring positive results but the most significant drawback to incentive programs is that they can limit customer investment in energy efficiency. Customers become programmed to only buy products that merit a subsidy, making other products less desirable. Risks creates another challenge. The risk involved with borrowing capital to make changes that could ultimately decrease consumption and therefore decrease sales could be frowned upon. An uncertain financial future also hinders investment.
Consumer behavior is listed as a major barrier to energy efficiency. A study, in the EU, pointed to a lack of awareness on savings potential and a lack of access to trusted information as the causes for slow progress. In the U.S., the Leadership Group, made up of more than 60 leading gas and electric utilities, state agencies, energy consumers, energy service providers, environmental groups, and energy efficiency organizations, identified key barriers limiting greater investment in cost-effective energy efficiency. Consumer behavior was listed among them. By relying on behavioral insights from academic research in behavioral science, economics and psychology improvements to the performance of traditional efficiency programs can be applied. Behavior-based tools and strategies like smart meters, provide data that could motivate consumers to save more energy.
Looking back at 2022, the potential benefits of energy conservation, management and efficiency are substantial. The Department of Energy has promoted energy efficiency by issuing regulations that increase the efficiency of the nation’s light bulbs. The agency also proposed an update to residential water heater and furnace energy efficiency standards. Looking forward, aside from high energy prices, what’s in store for 2023?
Thank Nevelyn for the Post!
Energy Central contributors share their experience and insights for the benefit of other Members (like you). Please show them your appreciation by leaving a comment, 'liking' this post, or following this Member.
Get Published - Build a Following
The Energy Central Power Industry Network is based on one core idea - power industry professionals helping each other and advancing the industry by sharing and learning from each other.
If you have an experience or insight to share or have learned something from a conference or seminar, your peers and colleagues on Energy Central want to hear about it. It's also easy to share a link to an article you've liked or an industry resource that you think would be helpful.
Your access to Member Features is limited.
Sign in to Participate