Source: ACEE    By Rachel Gold   2.20.19

An increasing number of states are finding new ways to track and value energy savings over time, according to research published today. Energy efficiency savings can accrue over many years, but most policies focus only on the first year. Our report, Energy Efficiency Over Time: Measuring and Valuing Lifetime Energy Savings in Policy and Planning, explores recent state efforts to take a longer view and the challenges they face when policies track only short-term savings.

Energy efficiency offers a family tree of options for customers, from the “grandparents” – investments in efficient new construction that can last more than 40 years – to more youthful air conditioning filter replacements that last just a few months. Because of this range in lifetimes, energy efficiency can provide varying values in resource planning, climate policy, and investment decisions.

(Typical lifetimes of savings from various measures installed or implemented in 2020.)

So far, policies have generally focused on first-year savings, because this approach makes it easier to describe, measure, and plan programs. These policies may unintentionally favor measures with high first-year savings, some of which may not continue to deliver savings over a long time. However, a focus on first-year savings does not easily translate to resource planning and climate investment, settings where long-term impacts are important.

The right mix of first-year and lifetime policies in cost-effectiveness testing, goals, incentives, and resource planning may vary from state to state based on other policy priorities like equity and bill impacts.

States are starting to experiment with new ways to value savings over time, and evaluators are providing better estimates of such savings. We see this emerging in two main areas: designing program administrator incentives and goal setting. Read more at https://aceee.org/blog/2019/02/gift-keeps-giving-energy-efficiency

Comments by RG:  Great article as in regard to LED lighting, the cost happens once and then the savings repeat year after; Do you need a lifecycle cost analysis of your potential retrofit?  Contact me here on site for help.