Report: Increasing Energy Efficiency Is Less Expensive Than Building New Generation

A new study from the American Council for an Energy-Efficient Economy (ACEEE), “Saving Energy Cost Energy-Effectively: A National Review of the Cost of Energy Saved Through Utility-Sector Energy Efficiency Programs,” states increasing the efficiency of a system is the cheapest, cleanest and fastest source of opening up available energy as compared to establishing new generating plants. The study shows the utility cost per kilowatt-hour (kWh) gained by increasing energy efficiency has held steady or even slightly declined at about 2.5 cents over the last five years, even as the costs for new coal, nuclear and other supply-side energy alternatives have risen.

The analysis updates the ACEEE’s research of 2004 that shows the average cost of delivering energy-efficiency programs in the United States was then 3 cents per kilowatt-hour.

According to the report, recent conventional energy supply-side options have typically cost between $0.07 and $0.15 per kWh. It estimates that is about three to four times the cost of energy-efficiency investments. Furthermore, the U.S. Energy Information Administration (EIA) estimates that in 2020, new conventional power plants including coal and nuclear will cost about $0.10 per kWh, or four times higher than current energy-efficiency program costs.

“Our new findings have major implications for the U.S. Senate deliberations on climate legislation, the upcoming Copenhagen summit, and state-level decisions about other sources for new power generation,” said Maggie Eldridge, report co-author, ACEEE. “The data show conclusively why energy efficiency should be universally regarded as the ‘first fuel’ in making energy decisions. It is cheaper, cleaner, faster and more easily realized than any other resource out there.”

Energy efficiency means new electrical transmission equipment, and electrical contractors are the only ones qualified to do this work. Keep an eye on legislation to continue to march down the energy-efficiency road.

The full study findings are available online and can be downloaded for free at

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