Will rising renewable costs spur energy efficiency?

Renewables are getting more expensive. That statement would have seemed crazy a couple years ago, but here we are. Global inflation, continued supply chain issues, and high interest rates have made promising renewable projects around the country less profitable, leading to cancellation in some cases. Now, many of those developers are lobbying state regulators to allow higher electricity prices. 

Maybe renewables will be the silver bullet to our climate change problem. But it looks like that day is farther off than many thought. If only there were another way to cut our carbon footprint and save customers money, right? 

After decades of stagnation, and atrophy in many instances, energy efficiency is low hanging fruit across America. Three years ago, the energy community was rocked by the Energy Efficiency Impact Report. Authored by the Alliance to Save Energy (ASE), the American Council for an Energy-Efficient Economy (ACEEE) and the Business Council for Sustainable Energy, the report came to some disturbing conclusions regarding the state of energy efficiency in the U.S.A. There is no single statistic that underlined our nation’s regression on energy efficiency in late 2019, rather there were a number of findings that together painted a picture of significantly decelerated progress. The authors warned that a failure to get back on track will have dire consequences for the environment and the country’s economic competitiveness. 

There were too many takeaways in the report to go over all of them, but a few stood out above the rest. Property Assessed Clean Energy investment, which is an instrument used to finance energy efficiency upgrades on private property, was beginning to slow after seeing a rapid rise from 2012 to 2017. On a similar note, ESCOs investments in energy efficiency had leveled off at around $5 billion. According to the report, that figure represented just a fragment of the ESCO market potential, which they estimated to be between $92 billion and $201 billion in 2016 dollars. 

States and municipalities in MISO could actually learn from California’s energy conservation legislation. For example, in addition to mandating low-hanging fruit measures like smart thermostats, legislators could pass strict efficient building codes like California has done and possibly even restrict certain appliances. Last year, California residents were barred from using a wide set of energy hungry electronics: "computers with high-speed networking capability, multi-screen notebooks, notebooks with cyclical behavior, and monitors with high refresh rates”. Such rule changes would be contentious, but maybe that’s just the price that has to be paid.