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EMF WP 13.1: Projecting Energy Efficiency Improvement Potential: A Comparison of Methodologies Used in Six Recent Studies

Working Paper

This paper reviews six recent studies of the potential for energy efficiency improvement in the U.S. It develops a standard by which the methodologies and results of these and other similar studies can be better compared and understood. Emphasis is placed on the quality and comprehensiveness of the technology data sources the studies use as inputs, and on the assumptions made and methodologies used to project the savings which might result from an adoption of these technologies. In particular, important modeling assumptions regarding economic and demographic trends are identified, as are the parameters which determine the adoption rate of new energy efficient technologies, and the methodologies used to compare their cost-effectiveness.

An important and often underemphasized aspect of most studies of energy efficiency improvement potential is found to be their assumptions of ideal market conditions for the adoption of energy efficient technologies. Authors of these studies commonly assume that social discount rate financing, as well as all necessary information, hardware and installation expertise, is available for the energy efficient improvements they consider. As a result, the studies identify an upper bound on achievable efficiency improvement potential, which could only be realized through large scale policy initiatives. Future studies of the likely cost and benefit of specific policy alternatives will be necessary to determine what portion of this total potential should ideally be targeted for attainment

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