This brief presents the most comprehensive estimates to date of the full cost of saving electricity through efficiency programs funded by customers of investor-owned utilities.
The total cost of the electricity efficiency resource includes the investment by both the program administrator and program participants in saving a kilowatt-hour (kWh). It is a valuable metric that resource planners, regulators and stakeholders can use to assess and compare the relative costs among efficiency programs and between efficiency and energy supply investments.
A previous report (Billingsley et al. 2014) drew upon the Lawrence Berkeley National Laboratory (LBNL) Demand-Side Management (DSM) Program Database to assess the costs to program administrators of saving electricity. For this brief, we updated the database with information from 20 states where one or more program administrators reported sufficient data for analysis of total costs. Based on more than 2,100 program years of data, we compare the total cost versus the program administrator cost of saved electricity at the national and state levels, for market sectors and for the most prevalent program types.
The U.S. average total cost of saved electricity, weighted by energy savings, was $0.046 per kWh for the period 2009 to 2013 for our dataset. The median value for programs with claimed energy savings across all sectors was $0.069 per kWh. This difference between the average and median reflects the fact that some programs delivered a large share of overall savings at a low total cost.