Climate and Energy Resources for State, Local and Tribal Governments

Understanding Cost-Effectiveness of Energy Efficiency Programs: Best Practices, Technical Methods, and Emerging Issues for Policy-Makers

This paper, Understanding Cost-Effectiveness of Energy Efficiency Programs, is provided to assist utility regulators, gas and electric utilities, and others in meeting the 10 implementation goals of the National Action Plan for Energy Efficiency’s Vision to achieve all cost-effective energy efficiency by 2025. This paper reviews the issues and approaches involved in considering and adopting cost-effectiveness tests for energy efficiency, including discussing each perspective represented by the five standard costeffectiveness tests and clarifying key terms.

The intended audience for the paper is any stakeholder interested in learning more about how to evaluate energy efficiency through the use of cost-effectiveness tests. All stakeholders, including public utility commissions, city councils, and utilities, can use this paper to understand the key issues and terminology, as well as the various perspectives each cost-effectiveness test provides, and how the cost-effectiveness tests can be implemented to capture additional energy efficiency. 

You may need Adobe Reader to view files on this page. See EPA’s About PDF page to learn more.