Comparative Analysis of Customer-Funded Energy Efficiency Programs in the United States and Switzerland-Cost-Effectiveness and Discussion of Operational Practices – Energy Policy – article

Comparative Analysis of Customer-Funded Energy Efficiency Programs in the United States and Switzerland-Cost-Effectiveness and Discussion of Operational Practices

Hae-In Cho, Alisa Freyre, Meinrad Bürer, Martin K. Patel | Energy Policy

2019-10-22

In the Swiss canton of Geneva, an energy efficiency portfolio has been operated since 2009. In contrast, such programs have been in place for more than 40 years in the US. There are numerous lessons to be learnt from their experience. We have therefore conducted a comparative analysis including Geneva and 11 leading states in the US, with the objective to identify explanatory factors for the success of energy efficiency programs. First, we compared total investment in energy efficiency programs between 2006 and 2015 and public policies related to energy efficiency in each state. Second, we analyzed the levelized cost of saved energy (LCSE) of the programs from the perspective of program administrators. Our cost-effectiveness analysis showed that the program investment scale has been strongly influenced by i) the existence of public mandates, which require program administrators to set ambitious targets and maximize their investment in cost-effective energy efficiency measures, ii) financial instruments that ensure program expenditure to be recovered, and iii) complementary funding from other programs. Moreover, learning and accumulated experience of the program administrators allow to reduce the LCSE. We conclude that the combination of financial instruments with public mandates can ensure a high level of effectiveness.

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