Net savings issue continues to evolve

January 16, 2014 | By Barbara Vergetis Lundin

One of the most prominent and longstanding technological, conceptual and policy challenges in the field of utility energy efficiency has been determining a program's net savings impacts.

In order to help policymakers, regulators, and utilities better understand this issue and how their peers are addressing it, the American Council for an Energy-Efficient Economy (ACEEE) conducted a national review of state approaches to the issue. They surveyed all 50 states and the District of Columbia, reviewed a large amount of recent industry literature and conducted interviews with national energy efficiency program evaluation experts.

The results indicate a great deal of diversity in how states are approaching the net savings issue, according to ACEEE. Nearly a quarter of states simply report gross savings. Another large segment nominally report net savings, but with a fairly simplistic approach (often just using deemed net to gross ratios). A small number of states are pursuing more complex approaches to measurement of net savings, including spillover and in some cases, broader market effects.

Even among evaluation professionals, while the majority support the use of net savings for program reporting and calculating lost revenues, there is no consensus on whether net savings is the metric that should be used, much less on what specific methodologies should be utilized to determine net savings, according to the research.

In the context of this diversity, the research seeks to present a snapshot of the current situation in the industry and provide some thoughts on key issues and concerns that are at play. The net savings issue is one where methodologies and policy approaches continue to evolve.

For more:
- download the report

http://www.fierceenergy.com/story/net-savings-issue-continues-evolve/2014-01-16