Association for Public Policy Analysis & Management

With over four decades of practice, energy efficiency (EE) has grown to a billion dollar industry in the US. Yet the industry endures the persistent challenge of delivering the full set of cost-effective measures to end-users. Although engineering estimates suggest huge potential, energy efficiency programs are frequently found not effective in tapping efficiency gains. Nevertheless, some EE programs are remarkably effective in achieving significant savings by leveraging useful resources. This study attempts to reveal the secret of the successful programs – the key design features – to provide information for improving the design and implementation of EE programs. We examine 63 awarding winning EE programs (exemplary programs honored by the American Council for an Energy-Efficient Economy, ACEEE), and measure their performance by total expenditure, number of participants, spending per participant, total energy savings, savings per participant, levelized cost of energy (LCOE), and benefit-cost ratio. Following the “design principals for carbon emission reduction programs” developed by Stern et al, this study created a unique dataset of program design and performance for the selected programs using information provided by the ACEEE report and third-party program evaluation reports. We found that the awarding winning programs often incorporate innovative features such as prioritizing technologies with the most potential, focused marketing, trustworthy relationship building, one-stop shopping, automation and other ways to simplify process, and quality assurance. The selected programs value these features because they can largely increase participation rate and satisfaction. Our multivariate regression analysis suggests that these features do not have significant effect on the number of participants and energy savings, while having significant influence on program spending, LCOE, and benefit/cost ratio.