Aggressive federal energy efficiency policies, such as building codes and appliance standards, would put money in consumer wallets in every state.
That’s the message of a new report that adds to evidence of the economic potential of curbing energy use. Analysts at the Consumer Federation of America (CFA) calculated that U.S. citizens would save $301 to $451 annually on average on their utility bills in 2030, if the nation slashes projected energy use by 20 to 30 percent, or 1 to 2 percent per year.
The report is one of the first to look at how strong federal efficiency policies would shrink home energy bills. Nationwide, households would save between $37 billion and $66 billion over two decades.
The savings would be a "cushion to soften the blow" of costlier climate measures, said Mark Cooper, the study’s author and research director at CFA, a consumer group of 300 organizations.
"Efficiency lowers consumer bills, which provides an important cushion against other aspects of climate policy that might push bills up," Cooper wrote.
To do the analysis, CFA looked to the states. The report is based on 24 state-level studies over 10 years and three recent reports from the National Research Council, McKinsey & Company, and the American Council for an Energy Efficient Economy (ACEEE).
The level of achievement varies widely. The research reveals that around six states have been able to slash energy use by 1 to 2 percent over the past two decades. In the 10 states with the strongest efficiency policies, energy use grew by an average 2.6 percent from 1990 to 2007. In contrast, the most inefficient energy users saw a 16.7 percent leap.
"The fact that a significant number of states have achieved a much higher level of efficiency is an indicator of the possibility for a much higher level of performance by all states," Cooper wrote.
California is the stand-out example. Energy consumption there has been almost flat for 30 years, while at the same time it shot up 50 percent nationwide. The savings are thanks to appliance and building standards, and utilities trimming back.
In Vermont — currently the "most aggressive state in promoting energy efficiency," according to CFA — energy consumption was above the national average three decades ago. By 2004, it was 30 percent below the rest of the country.
That can happen across America, CFA says, for less than half the current or projected price of energy.
The report puts the cost of conserved electricity at 3 cents per kilowatt-hour (kWh), compared with electricity prices that are just over over 9 cents per kWh.
Overall, the projected pocketbook savings are "very conservative estimates of the benefits consumers would see," Cooper said. The study does not factor in rising energy prices, improvements in technology or coming carbon regulations — all of which would add value to the efficiency resource.
Building Code ‘Largest Long-Run Impact’
To successfully cut energy use to the level the report advocates will take federal provisions to mandate more efficient buildings, Cooper told SolveClimate.
The single most important thing the U.S. Congress can do this year is to adopt the House-passed federal building code and ensure all 50 states enforce it, he said.
Last June, the U.S. House of Representatives approved the American Clean Energy and Security Act (ACES), which would put a price on carbon emissions for the first time. The bill included regulations that would require new buildings to be 30 percent more efficient by 2012 and 50 percent more efficient by 2016.
The program would have the "largest long-run impact by far," Cooper said.
But the bill seems highly unlikely to become law, courtesy of the U.S. Senate. That chamber appears to be dumping an economy-wide carbon-price pact altogether in favor of a hodgepodge of energy-only policies.
"It is truly amazing and distressing that efficiency gets almost no attention in the ongoing negotiation on the Senate side," Cooper said. "If new buildings are 50 percent more efficient and the longest-lived of the existing building are 30 percent more efficient, we could almost meet the goals of the House-passed climate change bill with efficiency alone at a net savings to consumers and the economy."
Still, energy efficiency isn’t completely off the table in the Senate. Lawmakers are considering a "Home Star" program, also known as "Cash for Caulkers," which would deliver cash rebates for upgrading as many as three million homes, along with "Building Star," which would retrofit existing, energy-guzzling buildings.
Cooper said that a program to do deep retrofits on "as many existing buildings as possible would be a natural complement" to greening the nation’s new structures, but both are needed.
Michael Noble, executive director of Fresh Energy, A Minnesota environmental group and member of CFA, said Home Star and Building Star "have a lot of momentum right now." They’re being "backed by a broad, diverse coalition of folks who all see the overwhelming benefits of efficiency."
Their biggest allure is jobs. The two programs would create over 300,000 jobs from now until the end of 2011, according to new data from ACEEE.
"The Home Star and Building Star bills will go to work immediately, stimulating the economy, creating at least 150,000 jobs in a sector that has a 25 percent unemployment rate," Noble said.
Other recommendations in the CFA report include appliance efficiency improvements and a strong federal energy efficiency resource standard (EERS) that would force utilities to meet energy-saving targets.
For Noble and other efficiency advocates, the EERS is the real prize.
The near-term incentives in play in the Senate "will serve as a bridge," he said, and "then EERS can take the reins and ensure that we are benefiting from all that efficiency has to offer for the next 20-30 years."