Energy efficiency measures lower electricity bills and reduce demand. They can also help businesses save money and improve their competitiveness.
Energy efficient products, like LED lights and ENERGY STAR certified appliances, cost more to purchase but typically save you money over their lifetimes by using less energy. Local governments can save energy costs by purchasing these products, and by incorporating efficiency criteria into product procurement decisions.
Cost Savings
Energy efficiency measures save money on utility bills by reducing demand for energy services. For example, installing ENERGY STAR certified lighting or heating and cooling equipment can lower energy bills dramatically. Other efficiency improvements, like insulating homes and buildings, can cut heating costs by about 30%.
Efficiency also reduces the need for fossil fuels by reducing electricity waste, thereby avoiding the use of coal and oil for power generation. Saving energy can even decrease the need for natural gas through reduced heating and cooking waste and better utilization of appliances.
Energy-efficient purchases have other multiple benefits beyond electricity savings, including a faster return on investment, improved work conditions and productivity, enhanced brand image, increased asset value, reduced operation costs, employee retention and recruitment, regulatory compliance, and more. Historically, these non-energy benefits have been difficult to quantify and often undervalued in cost-benefit screening of energy efficiency programs. This study addresses the gap by providing a rigorous methodology for measuring multi-benefits and improving the utility system’s cost-effectiveness screening process.
Environmental Benefits
Energy efficiency improves energy services like lighting, heating and cooling, and helps reduce greenhouse gas emissions. It also saves money by decreasing utility bills and reduces electricity demand on the grid, lowering costs for energy production and transmission.
For example, switching to LED light bulbs or installing insulation can significantly reduce energy consumption in homes. These efforts also conserve other natural resources, such as water.
Energy-efficiency measures are often the cheapest and fastest way to meet energy needs without producing greenhouse gases or other environmental impacts. They help lower energy bills, reduce operational expenses, create jobs and contribute to a stronger economy.
Health Benefits
Energy efficiency improvements in buildings improve indoor environmental quality and occupant health by reducing air contaminants and increasing ventilation. For example, studies show that homes with a higher level of insulation (or boiler replacements) have lower rates of asthma and chronic obstructive pulmonary disease symptoms.
Low-income households face a double burden of high energy bills and unhealthy housing, resulting in higher levels of respiratory illnesses and mental health issues. Energy programs can reduce these burdens by focusing their efforts on low-income communities and integrating health co-benefits into program design, work protocols, and cost-effectiveness practices.
For example, combining home repairs with energy efficiency upgrades can lead to improved self-reported health and reduced wheezing and days off of school or work. Further, whole-house ventilation strategies with heat or energy recovery ventilators can reduce fungal contamination with Aspergillus and Cladosporium spores in homes and increase comfort and occupant health. These benefits are especially important for healthcare facilities, which strive to provide comfortable and healthy environments for patients and employees alike.
Economic Benefits
Energy efficiency improves comfort and productivity in homes and businesses. It reduces exposure to volatile fossil fuel prices. It frees up internal capital to invest in other projects. It enables the use of renewable energy to offset or reduce energy costs.
New energy efficient technologies also create jobs in the manufacturing, installation and service of these products. Local, state and federal energy incentive programs provide further financial support for energy efficiency investments.
In addition, energy efficiency enables more renewables to be deployed and shifts more freight transport from trucks to rail. The ENERGY STAR program is perhaps the best example of this multi-benefit approach to energy conservation. It has provided cost reductions to utility customers (along with energy savings) and is now a guiding resource for energy policy makers and program evaluators.