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Energy Efficiency Programs Vary Depending on Market

January 15, 2015 By Linda Hardesty

ACEEEACEEE looked at ways energy efficiency programs serving utility customers could attain higher participation and found that strategies vary depending on the target customers. Small Business programs, for example, must be structured to serve a customer segment that is highly diverse, according to ACEEE’s report “Expanding the Energy Efficiency Pie: Serving More Customers, Saving More Energy Through High Program Participation.”

Individual small business customers typically have limited time, money, and expertise to address energy efficiency improvements that would benefit their businesses. Small business programs historically have relied heavily on lighting improvements, as these offer quick paybacks and are relatively simple to implement. Programs focused on a one-stop shop model appear to be especially important for achieving high participation in this customer segment.

In the commercial market, prescriptive incentive programs, targeting high-efficiency versions of equipment and systems are fairly standard and widely used. Historically, commercial lighting has been a major source of overall portfolio savings. Some programs move upstream: rather than providing incentives directly to customers, retailers and distributors receive incentives, which they then can pass along to their customers in the form of lower purchase prices. Prescriptive lighting incentives generally comprise the bulk of program participation. Large programs can serve from 1–3 percent of total business customers annually, with an emphasis on lighting measures. Participation for customers receiving HVAC incentives generally is much smaller.

Programs offering custom incentives for commercial and industrial customers offer untapped potential, according to ACEEE’s report. Because custom programs typically target the largest customers, the scale and focus of custom incentive programs are relatively small compared to the entire market of commercial and industrial customers. However these typically are among the largest customers, with correspondingly high energy use and often high savings potential. Targeting and serving these large customers with programs can yield high savings.

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