More New York Funds for Energy Efficiency, Data Reinforces Positive Impact of Investments

New York state’s latest initiative to reduce reliance on dirty energy comes in the form of $30 million to support adoption of cutting edge energy efficiency technologies.

Under the Energy Efficiency Market Acceleration Program (EE-MAP), the companies selected will get a lot of help from the state to commercialize their technologies.  

"This public-private partnership will help bring innovative green technologies into the marketplace, helping spur economic investment in the clean energy sector and protect our environment, while maintaining New York’s position as a leader in sustainability," says New York Governor Andrew Cuomo. "By supporting clean energy research and production, the state is helping create green jobs in communities across New York, while ensuring that our environment is protected for generations to come."

The program aims to attract cutting edge companies to locate in NY State by accelerating deployment and marketing of their technologies; forming strategic alliances and business development opportunities for them; and by training engineers and other key skilled providers to install and maintain their products in the state.

New York Power Authority (NYPA) released a RFP this week to select the companies which will participate in the program. Once selected, companies will identify commercially viable – but not yet widely deployed technologies – that hold significant promise for gaining market share and providing economic development benefits for New York.

Since the 1980s, NYPA has helped public sector customers such as schools, hospitals and municipal buildings shave peak electricity demand by about 225 megawatts (MW), saving $145 million in energy costs. 

NYPA is also financing $450 million in energy efficiency projects over the next four years as part of the state’s Energy Efficiency Portfolio Standard, which requires energy demand to drop 15% by 2015. Another $350 million is funding projects at the county and local levels, and in schools.  

NY State also recently passed laws to support solar development through tax relief and funds for small and large PV systems, and to support fuel cell installations. It also has incentives in place to help fleets convert to electric vehicles. That prompted Smith Electric to set up shop in the state.

Energy Efficiency’s Tangible Impact

Just how meaningful are energy efficiency projects from a conservation and economic point of view?

Last year alone, the Pacific Northwest freed up 277 MW of capacity through energy efficiency measures, saving about  $3.1 billion in energy costs. That’s about half the electricity of a power plant and enough to power nearly 190,000 homes.

Utilities, energy trusts and other stakeholders invested about $420 million in energy efficiency in 2011, reports the Northwest Power and Conservation Council, which gathered the data. The region – which has about 5% of the US population – spent 8% of all efficiency investments in the country, most of which was for improvements in commercial businesses and industrial facilities.

“Clearly utilities recognize the value to their customers and the region of low-cost, zero-emission energy efficiency,” Bill Bradbury, vice chairman of the Northwest Power and Conservation Council, told Electric Coop Today. “At less than 2 cents per kilowatt-hour, efficiency is a great complement to more expensive power from new generating plants as our demand for electricity grows.”

But What About the Rebound Effect? 

Some believe this increase in energy efficiency has little value because of the "rebound effect," however. Fossil fuels interest groups commonly posit that if people pay less for energy, they simply use more of it, quickly wiping any gains out. That’s one of the arguments they use to attack the value of federal energy efficiency measures.

The American Council for Energy-Efficient Economy (ACEEE) examined the potential effects of both direct and indirect rebounds in a new white paper, "The Rebound Effect: Large or Small?" Here is how it defines the two:

  • A direct rebound considers the effect that purchasing a more efficient product might have on behavior. For example, someone who buys a more efficient car might end up driving it more, while someone who invests in weatherizing his or her home might actually keep the house at a higher temperature than otherwise.
  • An indirect rebound refers to the impact of re-spending money saved by energy-efficiency measures. A company might decide to expand its factory because energy costs are lower, or a homeowner might use money saved on home heating costs for another purchase, such as a flat screen television.

After examining more than 100 studies on this subject, ACEEE concludes that the direct rebound effect is about 10% or less and the indirect rebound effect is around 11%.

Actually, this makes energy-efficiency look even better.

ACEE Executive Director Steven Nadel writes:

"These two types of rebound can be combined to estimate total rebound of about 20%. We examined claims of “backfire” (100% rebound), but they do not stand up to scrutiny. Furthermore, direct rebound effects can potentially be reduced through improved approaches to inform consumers about their energy use in ways that might influence their behavior. And indirect rebound effects, which appear to be linked to the share of our economy that goes to energy, may decline as the energy intensity of our economy decreases.

Overall, even if total rebound is about 20%, then 80% of the savings from energy efficiency programs and policies register in terms of reduced energy use, which benefits the environment and public health. And the 20% rebound contributes to increased consumer amenities (like more comfortable homes), as well as to a larger economy and more jobs. Therefore, these savings are not “lost,” but put to other generally beneficial uses."

For more on the rebound effect:

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