US ratepayer programs hold key to cutting industrial energy use

March 20, 2014

Well-designed energy efficiency programs can help industry achieve higher energy savings, cost savings and productivity improvements, the latest report by the SEE Action Network has found.

The report, Industrial Energy Efficiency: Designing Effective State Programs for the Industrial Sector, explores successful industrial energy efficiency (IEE) programs in the United States, and provides insights into the special characteristics of industrial customers as well as how programs can provide real value to industrial customers.

IIP was commissioned to write the report by the SEE Action Network, a state and local-led effort facilitated by the US Department of Energy and the Environmental Protection Agency.

One of the report’s key findings was that IEE programs need significant upfront investment and commitment but that the energy savings achieved warrant the effort – savings which go well beyond those made by individual firms as part of their own energy efficiency initiative.

IEE programs work by providing information, technical assistance and incentives to industrial facilities to support energy efficiency equipment upgrades and improved maintenance practices, and to promote strategic energy management programs for continual energy improvements. IEE programs, if designed and implemented well, can be more cost-effective than efficiency programs in the commercial and residential sectors, helping to ensure that states and regulatory utility commissions encourage delivery of energy services as cost effectively as possible. The report focuses primarily on ratepayer programs – i.e. those funded by electricity and gas customers.

Amelie Goldberg, North America program manager and primary author of the report, says it was clear from the research that many of the energy efficiency programs in the US were helping industry and ratepayers save money.

“Our research showed that industrial energy efficiency programs offer participants extensive savings by reducing energy bills. What's more, program incentives can help reduce payback periods and internal hurdle rates of energy-saving projects, thereby helping to tip corporate decision-making in favor of energy efficiency investments. Including industrial companies in the utility program portfolio also benefits the whole system: the huge cost-effective potential for energy efficiency in the industrial sector offers states and utilities an attractive option to meet increasingly stringent state clean energy portfolio standards quickly and efficiently,” Ms. Goldberg says.

“There’s no question that industry’s participation in energy-saving efforts can help eliminate or delay the need to build more expensive power generation, transmission and distribution capacity. Looking ahead, everyone’s rates can be kept down by ensuring the majority of energy customers have access to energy efficiency services, such as those offered through IEE programs.”

IIP will be co-hosting a series of webinars on the findings of the report. Sign up for our news updates to ensure you’re among the first to know about the webinars.