NewEnergyNews: Monday Study – Energy Efficient Buildings And The New Energy Future/


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    Tuesday, July 12, 2022

    Monday Study – Energy Efficient Buildings And The New Energy Future

    Future of Energy Efficiency in Buildings: Drivers and Market Expectations

    Steven R. Schiller, Jeff Deason, Kelly Parmenter, Greg Leventis and Lisa Schwartz, June 2022 (Lawrence Berkeley National Laboratory)

    Key Takeaways – Based on Research (including Literature Review, Interviews, and Questionnaire)

    Interacting categories of drivers that will influence the future of energy efficiency in buildings

    Two major driver categories:

    • Public policies and regulations, particularly those associated with greenhouse gas (GHG) emission mitigation and adaptation

    • Cost of energy (relative to the cost of delivering efficiency) Four other important driver categories:

    • Efficiency technologies

    ’ • Economic conditions

    • Societal priorities

    • Efficiency industry (including utility) business practices for increasing the uptake of efficiency in buildings

    Predictions for energy efficiency in buildings over the next ten years

    • Some efficiency technologies (e.g., heat pumps, building shell measures) and technologies that support efficiency (e.g., data access, artificial intelligence) are primed for significant performance improvements. However, for some end-uses and technologies (e.g., lighting, heating systems) efficiency improvements will not advance as fast as historic rates.

    • Electric efficiency actions will become more focused on demand flexibility and energy use reductions during specific times via controls and integration with other distributed energy resources (DERs) in grid-interactive efficient buildings and communities. Efficiency will also be an important component of electrification efforts.

    • Marketing of efficient products and services will increasingly focus on grid services, decarbonization, DER integration, non-energy benefits (for consumers), and Environmental, Social and Governance (ESG) criteria (for investors).

    • Public investment will increase in historically-underserved, disadvantaged communities in recognition of the social, health, and safety benefits of reducing energy usage and to redress historical underserving of these communities’ energy needs.

    • While state-specific actions will vary, overall state and local governments will increase their efficiency achievements. Our research suggests low-to-moderate national growth in efficiency-based energy savings – unless public policy mandates ramp up requirements, particularly with respect to GHG emission reductions, which would yield moderate-to-high growth for efficiency-based impacts

    Executive Summary

    Objectives and Focus

    • Primary objective: Identify drivers (influencing factors) of energy efficiency in buildings over the next ten years.

    • Secondary objective: Provide insights on what the future of efficiency may look like in that time period. (While the future is hard to predict, its drivers can be more reliably identified.)

    • Project focus: Energy efficiency in buildings—all fuels. Other DERs as well as decarbonization and demand flexibility are included to the extent they are intertwined with energy efficiency activities.


    • U.S. consumers spend over $400 billion each year to power homes and commercial buildings that account for 40% of the nation's energy use and account for 35% of U.S. CO2 emissions. Much of this money and energy is wasted—over 30% on average. The energy efficiency market that addresses this waste supports over two million jobs across the country. (U.S. Department of Energy, 2021a and 2021b)

    • Understanding efficiency market drivers and possible future efficiency market attributes can help policy makers, regulators, utilities, and the efficiency industry make informed decisions—for example, how best to design policies and investments to support desired outcomes.


    • Survey of legislation, regulations and executive orders in 12 states: November-December 2020

    • Structured interviews with 22 experts: November 2020 - January 2021

    • Detailed questionnaires completed by 41 efficiency practitioners: August-September 2021

    • Extensive literature review: throughout 2021

    • Analysis of this research informed findings of this report

    Drivers of Energy Efficient Buildings

    Energy efficiency in buildings does not have a singular future. Instead, its attributes will vary across different jurisdictions and market sectors (e.g., residential, low-income, commercial, urban and rural). Attributes will be defined (driven) primarily by the unique characteristics of each of these sectors and by six interacting and overlapping categories of market drivers.

    Drivers likely to be very important: Policy and Energy Costs

     Energy and climate policies and regulations, including building and economy-wide decarbonization and performance-based regulation for utilities

     Cost of energy to consumers (and rate structures, e.g., fixed vs. variable prices) relative to cost of implementing efficiency actions and other options to reduce energy costs Drivers likely to be important: Technology Advances, Economic Conditions, and Societal Priorities

     Advances in efficiency of some electricity-consuming equipment (e.g., more efficient heat pumps)

     Extrinsic technological advances (e.g., advances in sensor and control technologies)

     Increasing importance of the time and (to a lesser degree) locational value of savings

     Status of the overall economy and changes in U.S. building stock demographics (e.g., building occupancy, density and energy use patterns, and population migration)

     Increased recognition of energy burdens in disadvantaged and underserved communities

     Societal emphasis on improving resilience and reliability of energy services, personal interest in addressing the environmental impacts of energy use, and use of ESG criteria for investments

    Driver potentially important: Business Practices to Increase Uptake of Efficiency in Buildings

     Wide implementation of innovative business models for marketing and implementing efficiency

     Access to skilled labor

     Increased availability of and access to low-cost financing options Expectations for Future of Energy Efficiency in Buildings

    1. While jurisdiction-specific actions will vary, overall state and local governments will increase their energy efficiency goals.

    2. Low-to-moderate growth is expected in efficiency-based energy savings across commercial, residential, and lowincome buildings, unless public policy mandates ramp up requirements yielding moderate-to-high growth.

    3. Efficiency investments will continue to consist of a mix of incentive-supported actions, adoption driven by codes and standards, and routine market adoption.

    4. Electricity efficiency actions will become more focused on demand flexibility and reductions in energy usage during specific times, rather than just annual or seasonal impacts.

    5. Efficiency improvements in some technologies will result in greater, cost-effective efficiency impacts—for example, heat pumps for space and water heating, building energy controls, and building shell components like windows. However, for some end-uses and technologies (e.g., lighting, motors and boilers), we will not see efficiency advances at the rate they have occurred in the past given existing high efficiency levels.

    6. Technological advances that support efficiency, such as interoperability of building systems and equipment, artificial intelligence, and universal internet access, will improve the efficacy of efficiency actions.

    7. The efficiency industry will increasingly focus marketing on:

     Grid services and demand flexibility

     Building decarbonization

     Efficiency’s non-energy benefits

     Efficiency in a package of other DERs

    8. Low-income programs will see increased investment and continue to take a separate route from other residential and commercial programs, with a specific portion of the efficiency industry continuing to focus on energy-burdened communities and households, including direct install/no-cost retrofits (e.g., weatherization). Low-income program designs will increasingly emphasize social benefits of reducing energy bills, the value of improving the health, safety and comfort of program participants, and the importance of addressing historic discrimination and lack of attention to such communities


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