Public and private funding for end-use energy efficiency actions is expected to increase significantly in the United States over the next decade. For example, Barbose et al (2009) estimate that spending on ratepayer-funded energy efficiency programs in the U.S. could increase from $3.1 billion in 2008 to $7.5 and 12.4 billion by 2020 under their medium and high scenarios. This increase in spending could yield annual electric energy savings ranging from 0.58% - 0.93% of total U.S. retail sales in 2020, up from 0.34% of retail sales in 2008. Interest in and support for energy efficiency has broadened among national and state policymakers. Prominent examples include (almost equal to)$18 billion in new funding for energy efficiency programs (e.g., State Energy Program, Weatherization, and Energy Efficiency and Conservation Block Grants) in the 2009 American Recovery and Reinvestment Act (ARRA). Increased funding for energy efficiency should result in more benefits as well as more scrutiny of these results. As energy efficiency becomes a more prominent component of the U.S. national energy strategy and policies, assessing the effectiveness and energy saving impacts of energy efficiency programs is likely to become increasingly important for policymakers and private and public funders of efficiency actions. Thus, it is critical that evaluation, measurement, and verification (EM & V) is carried out effectively and efficiently, which implies that: (1) Effective program evaluation, measurement, and verification (EM & V) methodologies and tools are available to key stakeholders (e.g., regulatory agencies, program administrators, consumers, and evaluation consultants); and (2) Capacity (people and infrastructure resources) is available to conduct EM & V activities and report results in ways that support program improvement and provide data that reliably compares achieved results against goals and similar programs in other jurisdictions (benchmarking). The National Action Plan for Energy Efficiency (2007) presented commonly used definitions for EM & V in the context of energy efficiency programs: (1) Evaluation (E) - The performance of studies and activities aimed at determining the effects and effectiveness of EE programs; (2) Measurement and Verification (M & V) - Data collection, monitoring, and analysis associated with the calculation of gross energy and demand savings from individual measures, sites or projects. M & V can be a subset of program evaluation; and (3) Evaluation, Measurement, and Verification (EM & V) - This term is frequently seen in evaluation literature. EM & V is a catchall acronym for determining both the effectiveness of program designs and estimates of load impacts at the portfolio, program and project level. This report is a scoping study that assesses current practices and methods in the evaluation, measurement and verification (EM & V) of ratepayer-funded energy efficiency programs, with a focus on methods and practices currently used for determining whether projected (ex-ante) energy and demand savings have been achieved (ex-post). M & V practices for privately-funded energy efficiency projects (e.g., ESCO projects) or programs where the primary focus is greenhouse gas reductions were not part of the scope of this study. We identify and discuss key purposes and uses of current evaluations of end-use energy efficiency programs, methods used to evaluate these programs, processes used to determine those methods; and key issues that need to be addressed now and in the future, based on discussions with regulatory agencies, policymakers, program administrators, and evaluation practitioners in 14 states and national experts in the evaluation field. We also explore how EM & V may evolve in a future in which efficiency funding increases significantly, innovative mechanisms for rewarding program performance are adopted, the role of efficiency in greenhouse gas mitigation is more closely linked, and programs are increasingly funded from multiple sources often with multiple program administrators and intended to meet multiple purposes.

This Energy Efficiency Program Impact Evaluation Guide describes the common terminology, structures, and approaches used for determining (evaluating) energy and demand savings as well as avoided emissions and other non-energy benefits resulting from facility (non-transportation) energy efficiency programs that are implemented by local governments, states, utilities, private companies, and nonprofits. While this guide does not recommend specific approaches, it provides context, planning guidance, and discussion of issues that determine the most appropriate evaluation objectives and best practices approaches for different efficiency portfolios. By using standard evaluation terminology and structures and best practices approaches, evaluations can support the adoption, continuation, and expansion of effective efficiency actions. The primary audiences for this guide are energy regulators; public and private energy efficiency portfolio administrators such as utilities, nonprofit organizations, and government agencies; program implementers; and evaluators looking for guidance on the following: - The evaluation process and approaches for determining program impacts - Planning evaluation efforts - Key issues associated with establishing evaluation frameworks for improving the efficacy of energy efficiency portfolios, documenting the impacts of such portfolios, and comparing demand- and supply-side resources. Introductory portions and appendices are also intended for policymakers seeking general information about efficiency program impact evaluation as well as the basic principles of process and market evaluations and cost-effectiveness analyses. Although the guide is not directly intended for expert evaluation practitioners who can rely on more detailed and specific resources that are referred to in this guide, it offers introductions to and summaries of evaluation topics that can be useful for explaining concepts and standard practices to clients, new staff, stakeholders, and others who could benefit from a refresher on principles

This report is a scoping study that identifies issues associated with developing a national evaluation, measurement and verification (EM & V) standard for end-use, non-transportation, energy efficiency activities. The objectives of this study are to identify the scope of such a standard and define EM & V requirements and issues that will need to be addressed in a standard. To explore these issues, we provide and discuss: (1) a set of definitions applicable to an EM & V standard; (2) a literature review of existing guidelines, standards, and 'initiatives' relating to EM & V standards as well as a review of 'bottom-up' versus 'top-down' evaluation approaches; (3) a summary of EM & V related provisions of two recent federal legislative proposals (Congressman Waxman's and Markey's American Clean Energy and Security Act of 2009 and Senator Bingaman's American Clean Energy Leadership Act of 2009) that include national efficiency resource requirements; (4) an annotated list of issues that that are likely to be central to, and need to be considered when, developing a national EM & V standard; and (5) a discussion of the implications of such issues. There are three primary reasons for developing a national efficiency EM & V standard. First, some policy makers, regulators and practitioners believe that a national standard would streamline EM & V implementation, reduce costs and complexity, and improve comparability of results across jurisdictions; although there are benefits associated with each jurisdiction setting its own EM & V requirements based on their specific portfolio and evaluation budgets and objectives. Secondly, if energy efficiency is determined by the US Environmental Protection Agency to be a Best Available Control Technology (BACT) for avoiding criteria pollutant and/or greenhouse gas emissions, then a standard can be required for documenting the emission reductions resulting from efficiency actions. The third reason for a national EM & V standard is that such a standard is likely to be required as a result of future federal energy legislation that includes end-use energy efficiency, either as a stand-alone energy-efficiency resource standard (EERS) or as part of a clean energy or renewable energy standard. This study is focused primarily on this third reason and thus explores issues associated with a national EM & V standard if energy efficiency is a qualifying resource in federal clean energy legislation. Developing a national EM & V standard is likely to be a lengthy process; this study focuses on the critical first step of identifying the issues that must be addressed in a future standard. Perhaps the most fundamental of these issues is 'how good is good enough?' This has always been the fundamental issue of EM & V for energy efficiency and is a result of the counter-factual nature of efficiency. Counter-factual in that savings are not measured, but estimated to varying degrees of accuracy by comparing energy consumption after a project (program) is implemented with what is assumed to have been the consumption of energy in the absence of the project (program). Therefore, the how good is good enough question is a short version of asking how certain does one have to be of the energy savings estimate that results from EM & V activities and is that level of certainty properly balanced against the amount of effort (resources, time, money) that is utilized to obtain that level of certainty. The implication is that not only should energy efficiency investments be cost-effective, but EM & V investments should consider risk management principles and thus also balance the costs and value of information derived from EM & V (EM & V should also be cost-effective).

Despite progress that has been made in recent years, further improvements are needed in the methodologies commonly used to evaluate the energy savings arising from voluntary energy-efficiency programs. These voluntary programs are characterized by the fact that they do not involve mandatory codes or standards but instead use information and incentives to further the adoption of energy-efficient technologies and practices. Voluntary programs frequently are aimed at long-term transformation of markets that make lasting changes in consumer patterns of energy use. To date, many of the evaluations of such programs have focused on the direct effects to program participants and have not addressed the associated market transformation to the extent possible. Using information gathered through an extensive methodological review, the authors describe useful approaches taken in previous evaluations and draw conclusions concerning the best methods available for forecasting and measuring the impacts of voluntary programs.

A Manual for the Economic Evaluation of Energy Efficiency and Renewable Energy Technologies provides guidance on economic evaluation approaches, metrics, and levels of detail required, while offering a consistent basis on which analysts can perform analyses using standard assumptions and bases. It not only provides information on the primary economic measures used in economic analyses and the fundamentals of finance but also provides guidance focused on the special considerations required in the economic evaluation of energy efficiency and renewable energy systems.