Energy Efficiency Programs in Southwest Expected to Realize Billions in Net Benefits

In early October, the Southwest Energy Efficiency Project (SWEEP) published a report highlighting the economic, environmental, and health benefits that would result from investing in utility energy efficiency programs. The report, titled “The $20 Billion Bonanza”, claims that investing $17 billion in energy efficiency programs (the estimated amount necessary to achieve their goal of 21 percent energy reductions by 2020) would result in $37 billion in total benefits. This would produce $20 billion in total net benefits or $2,650 in benefits per household in the region.

SWEEP is a public interest organization that works to promote energy efficiency in Arizona, Colorado, Nevada, New Mexico, Utah, and Wyoming. SWEEP’s programs focus on utility energy efficiency policy and demand-side management (DSM) practices, and promote combined heat and power systems. Since inception in 2001, SWEEP has added transportation and building efficiency programs to its agenda as well.

SWEEP’s recent report identifies 18 best practice energy efficiency programs for residences, businesses, and industries, which the organization believes will help achieve its goal of reducing energy consumption by 21 percent. These programs include a range of activities such as providing weatherization services to low-income households, offering incentives and rebates for purchasing efficient appliances, performing audits, and offering training sessions to promote better compliance with current building codes.

The southwest region has steadily increased its energy savings through the help of SWEEP programs. In 2008, the region spent $174 million on DSM programs, which helped save about 1,200 gigawatt hours that year. In 2011, DSM spending almost doubled to $318 million and energy savings increased to about 1,650 gigawatt hours.

SWEEP savings chart

SWEEP predicts that continuing investment in DSM and other energy efficiency programs will lead to several economic benefits in the region. The report estimates that their new programs will add 28,000 jobs and increase wages by more than $1 billion by 2020. Additionally, SWEEP predicts that the average Gross State Product for the region will increase by nearly $300 million by 2020.

Reducing energy consumption also has many associated environmental and health benefits. SWEEP estimates that the implementation of its programs will avoid 31.6 million metric tons of carbon dioxide emissions, a 15.5 percent reduction. SWEEP also predicts its programs will reduce water consumption by 12.9 percent, which will be tremendously valuable to the arid desert region.

Reducing emissions and pollution improves the region’s air quality, which leads to improvements in public health. Estimated health benefits include less chronic bronchitis and asthma, fewer hospital admissions for respiratory and cardiovascular diseases, and reduced premature mortality. The report claims that these health benefits will save a total of over $500 million between 2010 and 2030. Other benefits include increased quality of life, property values, and employee productivity.

It is important to note that these benefits are not specific to the southwest region. Implementing DSM and energy efficiency programs across all regions of the United States has the potential to affect similar economic, environmental, and health change. While many national energy policies and companies prioritize the supply of energy as the main tactic for achieving energy security, modifying and managing consumer demand for energy is a crucial element that may provide an even greater return on investment. SWEEP’s cost-benefit analysis concludes that, for every dollar invested in DSM and energy efficiency programs, $2.14 are realized in benefits.

Demand-side energy management, which focuses on energy load shifting and load reduction, can be performed at any scale and its benefits can begin to be realized almost immediately. Although the demand side of the market is often neglected and underrepresented in policy, DSM has the potential to contribute substantially to energy security and merits more consideration by the government agencies responsible for restructuring the energy market.

Featured image courtesy of “Electricity Savings in 2020 by Program” chart courtesy of SWEEP Regional Fact Sheet.