Do Energy Efficiency Investments Deliver? Evidence from the Weatherization Assistance Program
Conventional wisdom suggests that energy efficiency (EE) policies are beneficial because they induce investments that pay for themselves and lead to emissions reductions. However, this belief is primarily based on projections from engineering models. This paper reports on the results of an experimen...
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| creator | Fowlie, Meredith Wolfram, Catherine Greenstone, Michael |
| description | Conventional wisdom suggests that energy efficiency (EE) policies are beneficial because they induce investments that pay for themselves and lead to emissions reductions. However, this belief is primarily based on projections from engineering models. This paper reports on the results of an experimental evaluation of the nation’s largest residential EE program conducted on a sample of more than 30,000 households. The findings suggest that the upfront investment costs are about twice the actual energy savings. Further, the model-projected savings are roughly 2.5 times the actual savings. While this might be attributed to the “rebound” effect – when demand for energy end uses increases as a result of greater efficiency – the paper fails to find evidence of significantly higher indoor temperatures at weatherized homes. Even when accounting for the broader societal benefits of energy efficiency investments, the costs still substantially outweigh the benefits; the average rate of return is approximately -9.5% annually. |
| doi_str_mv | 10.3386/w21331 |
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Evidence from the Weatherization Assistance Program</title><source>National Bureau of Economic Research Publications</source><source>Alma/SFX Local Collection</source><creator>Fowlie, Meredith ; Wolfram, Catherine ; Greenstone, Michael</creator><creatorcontrib>Fowlie, Meredith ; Wolfram, Catherine ; Greenstone, Michael</creatorcontrib><description>Conventional wisdom suggests that energy efficiency (EE) policies are beneficial because they induce investments that pay for themselves and lead to emissions reductions. However, this belief is primarily based on projections from engineering models. This paper reports on the results of an experimental evaluation of the nation’s largest residential EE program conducted on a sample of more than 30,000 households. The findings suggest that the upfront investment costs are about twice the actual energy savings. Further, the model-projected savings are roughly 2.5 times the actual savings. While this might be attributed to the “rebound” effect – when demand for energy end uses increases as a result of greater efficiency – the paper fails to find evidence of significantly higher indoor temperatures at weatherized homes. 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While this might be attributed to the “rebound” effect – when demand for energy end uses increases as a result of greater efficiency – the paper fails to find evidence of significantly higher indoor temperatures at weatherized homes. Even when accounting for the broader societal benefits of energy efficiency investments, the costs still substantially outweigh the benefits; the average rate of return is approximately -9.5% annually.</abstract><cop>Cambridge, Mass</cop><pub>National Bureau of Economic Research</pub><doi>10.3386/w21331</doi></addata></record> |
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| source | National Bureau of Economic Research Publications; Alma/SFX Local Collection |
| subjects | Climate change Consumer behavior Consumers Cost control Economic models Economic statistics Economic theory Emission standards Emissions Energy economics Energy efficiency Engineering Environment and Energy Economics Greenhouse gases Households Low income groups Participation Public assistance programs Rates of return Studies |
| title | Do Energy Efficiency Investments Deliver? Evidence from the Weatherization Assistance Program |
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