Energy Efficiency as a Resource: How the Utility Industry Benefits Buildings and the Economy

Written by: Johnathon Fata

Here at Waypoint Energy, we love to talk about our energy efficiency programs in terms of the benefits to the commercial real estate (CRE) industry and how they help utilities meet their efficiency goals. We’ve described our utility Connect Program and the benefits of energy efficiency previously here, here and here. And while the traditional benefits of energy efficiency to the CRE industry such as improved net operating income and increased asset value are as evident as ever, the benefits of energy efficiency extend well beyond the meter. In this blog, we’ll explore some of those additional benefits to utilities and the U.S. economy.


Cost Savings for Ratepayers


One of the largest benefits of energy efficiency to ratepayers (i.e. you and I) is described through the phrase Energy Efficiency as a Resource. This term is used to describe efficiency as an alternative or replacement to traditional generation such as coal or natural gas-fired power plants. To demonstrate this value, take for example, a forecasted long-term increase in electricity demand within a given utility service territory. No utility wants their customers to suffer from rolling blackouts or brownouts as has occurred in the past. When this situation happens, a utility has two primary options. The first is to make a large capital investment to either purchase or develop a

new power generator – this can cost nearly $600 million for a 500 MW natural gas plant. The second is to deploy energy efficiency as a resource to help meet that demand, for example via utility incentive and rebate programs to manage and reduce demand-side usage.


In this scenario, the cost of deploying energy efficiency as a resource to meet that forecasted long-term increase in demand is about one-third that of deploying a new power plant to meet that demand. This decreased cost translates directly into ratepayer savings for commercial, industrial and residential customers. These investments have saved ratepayers billions of dollars over the past 40 years, and the state of California is a great example of that. These cost savings benefit ratepayers throughout the country and will continue to do so as efficiency spending reached $7.7 billion in 2015, and continues to grow.


Job Growth for the U.S. Economy


In addition to the cost savings captured by ratepayers, energy efficiency is also a driver of job growth in the U.S. economy. Millions of Americans work directly in the energy efficiency industry. From energy efficiency consultants (like Waypoint Energy) to HVAC contractors, lighting manufacturers and installers, there are millions of secure, long term jobs within the industry. In fact, currently 2.2 million Americans work in the energy efficiency industry as of Q1 2017. The concept of energy efficiency positively impacting the economy and the job market was a hot topic at the Midwest Energy Efficiency Alliance’s (MEEA’s) Midwest Energy Solutions conference last month, which Waypoint Energy Manager Johnathan Fata attended. Heath Knakmuhs, Senior Director of Policy from the U.S. Chamber of Commerce drove this point home at the conference, stating that the value of energy efficiency to the economy is one of the industry’s greatest value drivers.


Between the cost savings to ratepayers - from energy efficiency as a resource, to driving value for the CRE industry - utilities and all Americans will continue to benefit from energy efficiency into the future. Waypoint Energy is proud to employ a team of energy efficiency and CRE experts that are contributing to these benefits. Clearly, energy efficiency is a resource to the CRE industry, utilities, rate payers, and the American economy.