Measuring Efficiency

Posted on February 10, 2014
Posted By: Rick Barnett

The value of energy efficiency has been documented and expressed countless times. A recent example can be found in Energy Manager Today: "NY Property Owner Retrofits with LED's, Saves $300,000 Per Year" (

This headline seems reasonable, except that saving is putting something aside, like money in the bank, for use in the future. But that's not what LED's do: only batteries save electricity for future use. The headline raises two questions: how can light bulbs save energy and money, when they consume purchased electricity? And how is the installation of a product equated with reduced consumption?

Most efficiency products and services are marketed as the source of energy and dollar savings. This includes controls, sensors, home energy management, customer engagement, thermostats, light bulbs, appliances, water heaters, HVAC, insulation, windows and doors. But none can offer an actual measurement to evaluate the product or service, in terms of eliminated KWH.

If an LED uses half the energy to produce the same amount of light, the bulb certainly provides an opportunity to consume less energy. But, a new bulb doesn't assure anything: the actual "savings" (i.e., eliminated KWH) is a function of how the bulb is used. Just like an incandescent, any time an LED is on for no purpose, energy is being wasted, not saved.

One way to calculate "product to savings" goes like this: when a incandescent (less efficient product) is replaced with an LED (more efficient product), an energy credit is given for the difference between the 2 products, in theoretical energy consumption over their projected lives. This calculated amount of electricity can be treated as "avoided electrical consumption". Using less saves the consumer money, based on a separate assumption about the price for energy.

In the example about the NYC property owner, the only place to look for the projected $300,000 savings is the energy bill. But this is tallied at the meter, which records aggregated energy consumption, without separate measurement for the LED's. When the meter spins less, it's impossible to tell if the change results from new bulbs, lower occupancy, higher price, or more conscientious usage. Projected savings from efficiency products are based on reasonable assumptions, but the inability to measure raises the question: how reliable are these "product to savings" calculations?

Separate from consumer-oriented marketing as saving money, efficiency products are credited with saving energy, as part of utility or public sector efficiency programs. For these programs, the "avoided consumption (KWH)" of efficiency products is like currency: the success of an efficiency program is based on claiming a sufficient amount of credit-from-products. The question of reliability for this method of calculation has far-reaching implications.

In the public sector, New York's Energy Research and Development Agency (NYSERDA, ) administers a state-level program that uses the "products to savings" calculation to guide financial incentives. Their lengthy list of energy saving products is at

At the federal level, HUD, DOE, EPA, USDA and others have programs that financially support the installation of efficiency products. For example, on 12/3/13, HUD announced a new efficiency program for Multi-Family Housing ( HUD expects that the new efficiency products will allow residents to "cut energy waste (20% in 10 years) and help families save on their utility bills". Although this projection seems possible, the accuracy cannot be confirmed.

While using more and better efficiency products is a no-brainer, the absence of measurement deserves attention. Everyone's interests are served if these programs can assure that only the most effective products are used, and that we are getting the best mileage from public dollars.

To the side of the more recognized efficiency options, a new option includes better measurement. "Thermal optimization" (, produces a thoroughly sealed thermal shell. Because it is an efficiency system rather than just a product, the results of a thermal upgrade can be evaluated with scoring tools such as the Energy Performance Score (Energy Trust of Oregon, A performance score indicates the propensity of a building to consume energy for normal conditioning of interior space. This provides a reliable projection of future consumption.

Trends in the utility industry show increasing value for the measurability of thermal upgrades. Thermal optimization offers utilities an opportunity to expand their customer-oriented services, and gain an emission reduction tool.

Authored By:
Rick Barnett has a B.A. in psychology (UCSB) and an Interdisciplinary Master’s in Environmental Management (Oregon State University, 1981).  Before becoming a builder, Rick introduced the Oregon waste management industry to recycling in 1976, and over the next few years convinced many to offer recycling as a service.  Oregon has been a national leader in recycling ever since.Rick started Green Builder in 1996, and was recognized in 1998 by Sustainable

Other Posts by: Rick Barnett

Efficiency Gap - March 07, 2016
Energy Asset - January 21, 2016
After Weatherization - September 25, 2015
Energy Customers - April 08, 2015


February, 12 2014

Bob Amorosi says

Very thought-provoking article Rick; and you are correct, without specific product energy metering measurement, there is no sure way to gauge the efficiency gains of a new higher-efficiency product installed.

I am an electronics design engineer, and I can tell you there is an abundance of electricity metering devices for consumers on the market that are used for metering specific individual loads or specific individual circuits within a consumer's residence. The same is generally true for industrial applications.

There are also many consumer energy metering devices available meant to simply plug into a common AC wall outlet to meter an appliance’s power cord plugged into the metering device. Most now even have wireless communication that can network many such devices together to one central computer or data collection system. But these are usually expensive relative to the dollar value of the energy being metered, and are ergonomically unattractive to have boxes hanging off every wall outlet. Alternatively any devices that can be hidden in the building’s electrical wiring adds more cost due to the greater difficulty and hazards of connecting it up to high-voltage wiring, usually requiring a licensed electrician

In essence the over-whelming problem with these metering devices is they are not viewed as cost effective to purchase and install, particularly if one needs a licensed electrician to hook it up to a hard-wired load that is powered by 120VAC or higher.

Many appliance manufacturers however have been actively developing energy metering capabilities into their products, but only for larger energy consumption loads like dishwashers, refrigerators, etc. But these are highly competitive manufacturing industries where every penny in product manufacturing cost must be justified read sellable to consumers. As such only higher-end appliance products that sell to affluent consumers get these energy measuring features made available to them.

And no one even dreams of putting metering electronics on something as small as a light bulb, since the metering device will cost much more than the bulb itself.

The cost of metering devices must come down substantially and/or the cost of energy must go up substantially, and the ease of installation must be made simpler especially to retrofit an existing building, before such devices can become widely implemented. It may happen someday, the electronics industry has a history of making technology less expensive over time. But I won’t hold my breath waiting for it.

Bob in Ontario Canada

February, 15 2014

Fred Linn says

Utilities are only interested in profits.

The only efficiency utilities are interested in is efficiencies that increase their profits.

February, 18 2014

Don Hirschberg says

I only wish the electric utilities I invested in over the decades had been more profitable. In retrospect I wouldn't have bought any.

February, 19 2014

Herbert Hannam says

Someone needs to learn a little more about utilities, at least the ones I'm familiar with. They are allowed to earn a return on assets, but not on the delivered energy to the customer. Very distinct separation between the two. and in Wisconsin we have a percentage of energy usage that goes into a fund to encourage efficiency improvements. This program is closely reviewed and very transparent. The return on the investment is published annually and does appear to cost justify. The claimed energy savings are independently reviewed (KEMA I think) and reported. Free ridership is subtracted. In addition, some utilities also offer incentives to reduce energy consumption, like the Shared Savings program offered by Alliant. Seems counter intuitive, but they win when you reduce your energy consumption. What you might want to watch is the renewable investments. These are on the asset side, so why do you think they are so interested in putting them up? They are allowed (again In Wisconsin) to earn a return on these. Even when the cost of generation is way higher than the alternatives (usually coal or gas fired generation) last time I had visibility it was on the order of double the cost.

February, 19 2014

Bob Amorosi says

As can be inferred from Herbert's comments above, there are lots of profit incentives around for utility companies to improve their own generation efficiencies, but not for promoting customers' consumption efficiencies.

If Ontario where I live is any example, utility companies that are distribution only entities here must be forced by our provincial government to promote greater customers' consumption efficiencies and conservation behaviors. This is done through direct funding subsidies given to customers, and to distribution utilities that assist consumers with adopting conservation behaviors and/or to invest in higher efficiency appliances.

Fred Linn is therefore correct, our utility companies are not generally interested in promoting customer consumption efficiencies unless they can profit from it somehow, which doesn't happen, so they must be subsidized with taxpayers money to do it without losing any money.

Bob in Ontario

February, 19 2014

Don Hirschberg says

I have great difficulty understanding the many meanings of “efficiency” used in the article and the comments.

This is an energy site and when the word efficiency is used to mean something other than OUPUT/INPUT measured in the same units the writer is obliged to tell us what he means by efficiency.

I find in most cases the writers simply mean cheapest, or maybe highly cost- effective.

I want to take people to to Hawaii. I find it cheaper to lease a jet than buy a jet. (More efficient) I select the jet with the engines of highest thermal thermal e. (More efficient) I invite enough folks to fill all the seats. (More efficient) I have minimized the denominator – that's great but since the purpose of the trip is to play golf I have no numerator so it doesn't make any difference to the efficiency, It's zero.

February, 20 2014

Bob Amorosi says

The purpose for governments to promote more consumption efficiencies and conservation behaviors with consumers is to slow demand growth over time on the overall grid. This allows them to delay the huge upfront costs of building more generation. The other purpose dare I mention it is to buy more time to foster the replacement of fossil fuel generation with other more environmentally friendly sources, or should I say more perceived friendly sources.

Much more nuclear power generation could in theory provide plentiful amounts of clean energy sources for the grid, making promoting consumption efficiencies and conservation unnecessary. Too bad it is not getting at least some of the support it deserves to build more of it.

February, 21 2014

Don Hirschberg says

Bob wrote:”The purpose for governments to promote more consumption efficiencies and conservation behaviors ...”

Forgive me, I hardly ever think in terms of government and energy - especially federal government. In my long life except for my mailman and military service I have had almost no contact with the US Federal government. A long time ago when I turned 65 I visited a Social Security office to sign-up for SS payments. I had never received a federal check except for active duty pay.

*(My service in WWII was too brief to qualify for the GI Bill. I didn't take benefits after the Koran War because I had gotten my professional Ch.E degree between wars, at my own expense. How's that for poor timing.)

I have never known anyone working for the government. Well, that's not exactly true – I have never known anyone who got paid for working for the government. During WWII I knew some dollar-a-year people who worked a second job for years. Never heard a bitch from them.

I have written letters to Washington concerning energy. Whether to experts or politicians I always got polite and absolutely useless replies. They all seem to be Liberal Arts majors – don't know the difference between heat and temperature, between power and energy, etc.

EnergyPulse articles and comment often have so many acronyms (alphabet soup) of agencies and programs that I spend more time at my acronym finder than on the story.

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