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Article filed under Energy, Energy Self-Reliant States

Energy efficiency has economies of scale

| Written by John Farrell | No Comments | Updated on Nov 19, 2009 The content that follows was originally published on the Institute for Local Self-Reliance website at https://ilsr.org/energy-efficiency-has-economies-scale/

The report [Synapse Energy Economics Inc.: Costs and Benefits of Electric Utility Energy Efficiency in Massachusetts] is worth reading in full, but this paragraph is absolutely vital:

Synapse recently undertook an extensive review of numerous utility and third party EE programs from across the United States in order to explore the empirical relationship between the cost of saved energy (CSE) per kWh saved and program scale in terms of first year energy savings as a percentage of annual energy sales. In the analysis, we found that the CSE tends to decrease as energy savings increase relative to annual energy sales. This finding is contrary to the idea of an energy efficiency supply curve that is often constructed to estimate economic potential of energy efficiency measures. These supply curves generally indicate that the CSE increases as energy savings increase, much like a generation supply curve would. In English: Energy efficiency gets cheaper the more you spend on it. [emphasis original]

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About John Farrell

John Farrell directs the Energy Democracy initiative at the Institute for Local Self-Reliance and he develops tools that allow communities to take charge of their energy future, and pursue the maximum economic benefits of the transition to 100% renewable power. More

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