New Consortium for Energy Efficiency Report – High Stakes for Energy Efficiency

Given the critical role that state and local energy policy and regulations play in the development of energy efficiency marketplaces, HPC focuses on removing state and local barriers to the growth of small businesses seeking to thrive in the residential energy efficiency marketplace. HPC's policy efforts are focused on state-based cost-effectiveness testing.

Why this focus?

Virtually every state uses some version of the five cost effectiveness tests outlined in the 1983 California Standard Practice Manual (CA SPM). However, implementation of CA SPM cost tests has become inconsistent between states. In some states, application of flawed or outdated cost tests steer funds away from residential energy efficiency programs and ignore the majority of benefits (job creation, comfort, health improvements and many others) provided by home performance contractors.

How Big is the Problem?

Well, according to a recent Report by the Consortium for Energy Efficiency, in 2017, state based gas and electric energy efficiency and demand response program funding totaled $8.2 billion. In other words, all 50 states fund programs to capture energy efficiency resources – but, the question is whether this $8.2 billion is being spent in the right way.

To date, HPC and its partners have engaged 27 states in discussions about how best to update and align their cost effectiveness testing with their own state policy goals. These conversations with states have focused on the new National Standard Practice Manual (NSPM). The NSPM begins with the premise that states should develop their own cost-effectiveness test to reflect their own state energy, economic development, health, resiliency (and other) policies. 

By helping to update and modernize state based cost effectiveness testing, HPC is helping states better target the $8.2 billion annual investment in energy efficiency highlighted in the Consortium for Energy Efficiency Report.

Written by Joe Cullen, Director of Policy and State Outreach

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