Statistics

Psychiatry

Electrical engineering

Engineering

Environmental economics

Psychology

Economics

Microeconomics

Energy (signal processing)

Electricity

Operations management

Psychological intervention

Efficient energy use

Incentive

Cost effectiveness

Mathematics

Marginal cost

Annual Review of Resource Economics

This paper reviews the recent evidence on the effectiveness and cost-effectiveness of energy efficiency interventions. After a brief review of explanations for the energy efficiency gap, we explore key issues in energy efficiency evaluation, including the use of randomized controlled trials and incentives faced by those performing evaluations. We provide a summary table of energy savings results by type of efficiency intervention. We also develop an updated aggregate estimate of 2.8 cents per kilowatt hour (kWh) of net savings from utility energy efficiency programs but note that this estimate is based on aggregate utility-reported energy savings. Our review of the economics literature suggests that energy savings are often smaller than implied by utility-reported results, but some interventions appear to be cost-effective relative to the marginal cost of electricity supply.

Advances in Evaluating Energy Efficiency Policies and Programs