Spending on energy efficiency programs funded by electric and natural gas utility customers will double by 2025 to about $9.5 billion per year, according to projections published January 17 by researchers at Berkeley Lab.
These funds, which come from a charge on utility bills, historically constitute the nation’s largest source of spending on programs to foster the adoption of more efficient products and buildings. According to the Berkeley Lab report, energy efficiency programs funded by utility customers are projected to continue expanding beyond the traditional bastions of energy efficiency in the Northeast and West.
By 2025, states in the Midwest and South could account for 49% of total U.S. spending on customer-funded energy efficiency programs, up from 27% in 2010. By 2025, only a handful of states would not have significant customer-funded efficiency programs.
The projected growth in program spending is driven by policies in a number of states requiring that utilities obtain all cost-effective energy efficiency savings. Another driver is energy efficiency resource standards, which require electric utilities to meet minimum energy savings goals each year.
Total U.S. spending on electric and gas efficiency programs (excluding load management programs) is projected to grow in all scenarios examined, ranging from $6.5 billion to $15.6 billion in 2025, with a mid-range projection of $9.5 billion under a scenario in which states are fairly successful in ramping up their programs to meet state energy-savings policies now on the books. This compares to total spending of $4.8 billion in 2010.
If states remain on their current policy paths, annual incremental savings from electric energy efficiency programs could be expected to reach about 0.8% of retail electricity sales in 2025, compared to about 0.5% of retail electricity sales in 2010. Significantly, electricity savings at that level in 2025 could offset the majority of load growth forecasted through that year in the Energy Information Administration (EIA)’s most recent reference case forecast for electricity usage.
In the current policy and market environment, spending on gas energy efficiency programs is projected to continue its rise in the near term but flatten from 2015 onward, reflecting the influence of low natural gas prices and new state and federal equipment efficiency standards.
The report, entitled The Future of Utility Customer-Funded Energy Efficiency Programs in the United States: Projected Spending and Savings to 2025, was funded by the U.S. Department of Energy’s Office of Electricity Delivery and Energy Reliability.
Extract from an article in Science Daily January 17th