The brief is the fifth in a series of Berkeley Lab reports that are part of the Cost of Saved Energy Project. This brief describes analyses of cost and electricity savings data for more than 1,600 individual efficiency programs offered to customers of utilities that serve about half of U.S. electricity load. These data are reported to d by 78 program administrators in 36 states.

"The average cost to utilities to save a kilowatt-hour (kWh) in the United States is 2.5 cents, according to the most comprehensive assessment to date of the cost performance of energy efficiency programs funded by electricity customers. These costs are similar to those documented earlier. Cost-effective efficiency programs help ensure electricity system reliability at the most affordable cost as part of utility planning and implementation activities for resource adequacy. Building on prior studies, Berkeley Lab analyzed the cost performance of 8,790 electricity efficiency programs between 2009 and 2015 for 116 investor-owned utilities and other program administrators in 41 states. The Berkeley Lab database includes programs representing about three-quarters of total spending on electricity efficiency programs in the United States"--Abstract

We develop projections of future spending on, and savings from, energy efficiency programs funded by electric and gas utility customers in the United States, under three scenarios through 2025. Our analysis, which updates a previous LBNL study, relies on detailed bottom-up modeling of current state energy efficiency policies, regulatory decisions, and demand-side management and utility resource plans. The three scenarios are intended to represent a range of potential outcomes under the current policy environment (i.e., without considering possible major new policy developments).Key findings from the analysis are as follows:* By 2025, spending on electric and gas efficiency programs (excluding load management programs) is projected to double from 2010 levels to $9.5 billion in the medium case, compared to $15.6 billion in the high case and $6.5 billion in the low case.* Compliance with statewide legislative or regulatory savings or spending targets is the primary driver for the increase in electric program spending through 2025, though a significant share of the increase is also driven by utility DSM planning activity and integrated resource planning.* Our analysis suggests that electric efficiency program spending may approach a more even geographic distribution over time in terms of absolute dollars spent, with the Northeastern and Western states declining from over 70% of total U.S. spending in 2010 to slightly more than 50% in 2025, and the South and Midwest splitting the remainder roughly evenly.* Under our medium case scenario, annual incremental savings from customer-funded electric energy efficiency programs increase from 18.4 TWh in 2010 in the U.S. (which is about 0.5% of electric utility retail sales) to 28.8 TWh in 2025 (0.8% of retail sales).* These savings would offset the majority of load growth in the Energy Information Administration's most recent reference case forecast of retail electricity sales through 2025, given specific assumptions about the extent to which future energy efficiency program savings are captured in that forecast.* The pathway that customer-funded efficiency programs ultimately take will depend on a series of key challenges and uncertainties associated both with the broader market and policy context and with the implementation and regulatory oversight of the energy efficiency programs themselves.

Electric and natural gas energy efficiency in the United States is pursued through a diverse mix of policies and programmatic efforts, which support and supplement private investments by individuals and businesses. These efforts include federal and state minimum efficiency standards for electric and gas end-use products; state building energy codes; a national efficiency labelling program (ENERGY STAR®); tax credits; and a broad array of largely incentive-based programs for consumers, funded primarily by electric and natural gas utility customers. This book provides information on projected spending and savings of the future of utility customer-funded energy efficiency programs in the United States; and discusses the shifting landscape of ratepayer-funded energy efficiency in the United States.

We develop projections of future spending on, and savings from, energy efficiency programs funded by electric and gas utility customers in the United States, under three scenarios through 2025. Our analysis, which updates a previous LBNL study, relies on detailed bottom-up modeling of current state energy efficiency policies, regulatory decisions, and demand-side management and utility resource plans. The three scenarios are intended to represent a range of potential outcomes under the current policy environment (i.e., without considering possible major new policy developments). By 2025, spending on electric and gas efficiency programs (excluding load management programs) is projected to double from 2010 levels to $9.5 billion in the medium case, compared to $15.6 billion in the high case and $6.5 billion in the low case. Compliance with statewide legislative or regulatory savings or spending targets is the primary driver for the increase in electric program spending through 2025, though a significant share of the increase is also driven by utility DSM planning activity and integrated resource planning. Our analysis suggests that electric efficiency program spending may approach a more even geographic distribution over time in terms of absolute dollars spent, with the Northeastern and Western states declining from over 70% of total U.S. spending in 2010 to slightly more than 50% in 2025, with the South and Midwest splitting the remainder roughly evenly. Under our medium case scenario, annual incremental savings from customer-funded electric energy efficiency programs increase from 18.4 TWh in 2010 in the U.S. (which is about 0.5% of electric utility retail sales) to 28.8 TWh in 2025 (0.8% of retail sales). These savings would offset the majority of load growth in the Energy Information Administration's most recent reference case forecast, given specific assumptions about the extent to which future energy efficiency program savings are captured in that forecast. However, the pathway that customer-funded efficiency programs ultimately take will depend on a series of key challenges and uncertainties associated both with the broader market and policy context and with the implementation and regulatory oversight of the energy efficiency programs themselves.