Why Traditional Energy Efficiency Remains Essential

A practice that has been relatively stable, conceptually simple and, to some, downright boring for decades—energy efficiency—is rapidly experiencing significant changes within California’s evolving energy landscape.  

Traditionally, energy efficiency initiatives involve various strategies aimed at reducing consumption, or the load, of a home or building. Such measures include replacing equipment, weatherizing, installing system controls and changing behaviors, all of which measure success by energy use savings. 

However, as California looks to achieve its ambitious climate goals, it is triggering  a paradigm shift in how energy efficiency is treated. Rather than focusing on reducing energy itself, this new direction is being driven by a desire to reduce greenhouse gas (GHG) emissions associated with burning fossil fuels for energy use in buildings, known as building decarbonization. But, it does not mean that traditional energy efficiency is no longer important. 

Shifting to decarbonization goes beyond electrification

Unlike traditional energy efficiency measures, which rely on energy metrics such as kilowatt-hours (kWh) or therms, building decarbonization efforts use carbon-reduction metrics to determine the benefits of a project or technology. As a result, the source of energy and when it is used becomes equally or more important than how much energy is used. 

This shift becomes increasingly beneficial because California continues to make significant progress in cleaning the electricity mix by increasing the use of renewable energy sources. As a result, electrifying end uses of energy within buildings to replace on-site fossil fuel burning, specifically natural gas, is an impactful GHG reduction strategy. In addition, due to the intermittency of many renewable energy sources, the GHG content of the electricity grid can vary greatly throughout the day, increasing the importance of load management strategies and having flexible, controllable loads as a way to reduce carbon emissions. However, while these changes are shifting the emphasis to electrification and demand flexibility initiatives, traditional energy efficiency measures should remain as a key strategy in decarbonizing buildings to meet California’s climate goals.

California has a robust and successful history of reducing energy use through mandatory energy efficiency building codes, equipment standards and voluntary customer programs. A shining example, California’s support and prioritization of energy efficiency has helped keep per capita electricity usage flat since the mid-1970s while per capita consumption in the rest of the nation has increased by more than 30 percent. These efforts have saved Californians billions of dollars and significantly reduced pollution and GHG emissions. As the energy sector evolves, a continued emphasis on reducing energy use will benefit the state in many ways, including but not limited to the following. 

Reduced environmental impacts

A kilowatt-hour or therm of energy unused is one of the most effective resources for reducing a building’s impact on the environment. When energy is simply not used, there are no associated GHG emissions or need for additional resources, land or delivery systems. Even as the state continues to move toward 100% renewable energy, unchecked energy usage still has environmental implications. Renewable energy projects require raw materials, including some that involve mining, and have land use implications such as vegetation elimination. In addition, the development of renewable energy projects and the associated supply chain also result in GHG emissions, while simply reducing the need for generation assets avoids many of the environmental impacts and costs.

Make way for incoming load

Meeting statewide goals for GHG reductions will require changes in electrification strategies within both the built environment and transportation sectors. While these are important and necessary transitions, it also means new electric loads, such as charging millions of electric car batteries. Coupling new electrification strategies with energy efficiency will help ease the grid impacts of this new load and reduce capital investments needed for upgrading infrastructure to accommodate the proliferation of electric technologies. Similarly, investments in energy efficiency will help ensure that as new electric vehicles and appliances enter the market, they can be powered by GHG-free resources without requiring overbuilding of renewable energy projects.

Cost savings at all levels

Notably, energy efficiency initiatives reduce the need for costly transmission and distribution upgrades and maintenance costs as well as investments in new generation projects. As a result, utilities can lower customer costs or focus investments on other climate and resiliency initiatives. 

For residents and businesses, taking advantage of energy efficiency programs can result in significant and lasting savings on energy bills. Less money going toward energy costs can also mean more investment in the local economy as families and businesses use those savings for other purposes. This is especially important for low-income households who face a high energy burden and are disproportionately impacted by utility bills. Subsidies and financing for projects that reduce a home’s energy use therefore have valuable equity implications as costs are reduced and comfort and indoor air quality is often improved. In addition to funding for energy efficiency programs, it is essential that complementary policies continue to incentivize saving energy or not using fossil-fuel sources, such as appropriately compensating solar customers for exporting their unused generation to the grid.

Looking ahead: The future of energy efficiency

While greater emphasis should be placed on both the source of energy and the time when it is used to meet decarbonization goals, load reduction strategies should continue to be a key component of California’s energy policy portfolio. As CSE works with partners to achieve goals for decarbonizing California’s economy, as well as other states, traditional energy efficiency will remain essential to our vision of a sustainable future.