Efficiency Gap

Posted on March 07, 2016
Posted By: Rick Barnett

The 1980 USDOE report (DOE/PE-0020), “Low Energy Futures for the United States” evaluated US efficiency programs, and concluded that the country was moving toward a point where “efficiency improvements provide primary fuel savings that more than offset the growth in the demand for energy services” (page 20).  Numerous other studies and reports pointed to the cost-effectiveness and potential of efficiency.

In 1990, the term “efficiency gap” was introduced by Eric Hirst and Marilyn Brown, to describe the gap between actual efficiency investment, and the cost-effective level that was available to offset demand growth.  Their paper, entitled "Closing the Efficiency Gap: Barriers to the Efficient Use of Energy", initiated an ongoing inquiry about failing to capture the significant potential of energy efficiency.  DOE’s perspective on the efficiency gap was outlined in Lawrence Berkeley National Lab’s report.

Pursuing the efficiency gap, research by the academic collaborative E2e recently found unexpected results by tracking 30,000 energy retrofits for 3 years.  Using post-retrofit data, their evaluation of DOE’s Weatherization Assistance Program (WAP) found over-stated claims about the effectiveness of WAP’s weatherization measures. They concluded that “savings was just 39% of the average savings predicted by engineering models”. 

Since utility efficiency programs employ measures similar to WAP, over-stated results could exist in most US efficiency programs.  Even a small error is important, since efficiency program results become a credit toward:

  • • state energy agency goals and standards
  • • utility requirements from state commissions
  • • Federal emission reduction goals for Climate Action Plan, Clean Power Plan, and the Paris Agreement

A piece of the 61% gap could result from the convention of establishing efficiency product savings (sensors, bulbs, appliances, insulation, etc.) at the point of sale, without accounting for installation details and use.  For example, when R-21 fiberglass insulation is purchased, savings is calculated with the assumption that the entire volume of insulation will resist heat loss at the rated level over a long period of time. But, during installation, fiberglass is often compressed to a lower R-value due to framing, pipes, wires, ducts, etc.  Difficult-to-reach spots are missed, and scraps go to the trash.    After installation, any use of the attic results in a compressed, less-effective thermal barrier.  Efficiency products don’t always perform like they did at the factory.  And, since “savings” can’t be measured, the homeowner has no way to verify claims.

A homeowner who purchases a high-efficiency refrigerator can receive a rebate , and the efficiency investment is a credit toward meeting energy and emission goals.  But, if the unit will be used as the “extra” in the garage, such a purchase would not appear to be step toward reducing emissions.   The significance of calculated savings is weakened by this disregard for the way efficiency products are used.

The method of calculating saved energy for utility efficiency programs has developed over many years.  State utility commissions generally merge the savings calculation into tests for “cost-effectiveness”:  saved energy becomes a function of dollars spent.  The supporting statistics are typically presented as a footnote to older guideline documents such as the 2001 California Public Utility Commission’s (CPUC) “Standard Practice Manual” .

EPA’s guideline for calculated savings states that savings “cannot be directly measured.  Instead, efficiency program impacts are estimated by taking the difference between actual energy consumption after efficiency measures are installed, and what energy consumption would have occurred during the same period had the efficiency measures not been installed (i.e., the baseline)”.

ASHRAE’s“Guideline 14-2002 for Measurement of Energy and Demand Savings” states (page 4) “There is no direct way of measuring energy use or demand savings since instruments cannot measure the absence of energy use or demand.”   ASHRAE defines (page 4) saved energy as “the absence of energy use or demand can be calculated by comparing measurements of energy use and/or demand from before and after implementation of an energy conservation measure”.

From EPA and ASHRAE definitions, calculated savings from products should be expressed in KWh per equivalent unit of use: it should have a numerator and denominator.  But, convention has allowed the denominator to disappear, and saved energy is expressed in KWh, as reduced demand or avoided electrical generation.

Money placed in a savings account is available for use in the future, and therefore “saved”.  But unlike money in the bank, a homeowner isn’t assured any reduction on future energy bills after installing a more efficient product.  A high efficiency product certainly offers the opportunity to reduce consumption, but an LED might burn out after being accidently left on, or never even be installed.

The efficiency gap is driven by the notion that a product can “save” energy, even though in reality, the product consumes energy without self-regulation.  To be more accurate:  people, not the products they choose, can save energy. 

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 hauler 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

Energy Asset - January 21, 2016
After Weatherization - September 25, 2015
Energy Customers - April 08, 2015
Saving Energy - March 10, 2015


March, 07 2016

Richard Vesel says

One product or solution does not efficiency make.

For about a decade, my company has promoted programs to utilities and industry to perform a facility assessment, and examine process, controls, investment, incentives, and commitment to improving efficiency. Without executive charter and sanction and commitment to all of these, the rest won't happen. How do we get executive charter?

It has to come from the very top, not from any position which plays "musical offices" every 18-24 months. It has to be cast in concrete, with goals and metrics. It must be part of an ongoing process improvement strategy and process, and personal performance metrics of responsible people who can make the necessary changes and investments. It must be driven into the hearts and minds of the employee base that this is a corporate commitment, and those same people should be empowered to contribute, and receive constant feedback about "How we're doing" at the corporate level. They must be incentivized in a positive manner for showing positive results.

At the home level, there are many utility-sponsored whole-house energy efficiency audits that can be had for nominal costs, from free to under $100. Why are these not advertised, even supported as PSA's by the media (Public Service Announcements)?

As states begin to look at implementations of the Clean Power Plan, they can assist their local utilities with formal state-wide "Negawatt" programs, to reduce electric power consumption. Building a power plant costs (nominally) $1-5 per watt, when you look at gas-fired CCGT up through nuclear technology. Buying a lightbulb to reduce consumption by 90% (incandescent to LED) for a 100watt bulb, costs about 10 cents per watt. Ten million of these bulbs, in one state, would cost $100M to buy and GIVE away, as opposed to spending 10x-50x as much to build equivalent generation.

If states, on their own, insisted that HVAC and water heaters and refrigeration, washers, dryers all be of HE design, and nothing else could be installed, either in new homes or as maintenance replacements, then another huge bite of EE is provided.

Thinking outside the box of corporate bottom lines is the first step. Making EE improvements easy and relatively painless is the next step. Finally, elimination of non-EE options for behavior is the final step. Wastefulness should not be an option for personal or corporate behaviors.


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