New York

New York State Energy Research and Development Authority (NYSERDA)

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Program Summary:

New York State has one of the largest and longest running state-run energy efficiency programs in North America. The New York State Energy Research and Development Authority (NYSERDA) was originally created in 1975 and focused primarily on energy research and development (R&D) in New York before taking over the state-wide energy efficiency programs. It represents a model of government administered energy efficiency. NYSERDA is a public benefit corporation funded primarily through fees paid by ratepayer through their energy bills. NYSERDA’s energy efficiency program covers both electricity and natural gas.

NYSERDA administers its System Benefit Charge (SBC) funded programs under the "New York Energy $mart" brand, and works with a network of contractors to implement these programs.  Financial assistance in the form of rebates and performance incentives are offered to large commercial and industrial customers as an encouragement to make investments in efficient equipment. NYSERDA also performs work in several areas other than energy efficiency resource acquisition that are not discussed below. These efforts include energy related research and development, technology and market development, and renewable energy implementation. These other work areas are funded primarily through customer charges separate from the energy efficiency system benefits charge.

Program information

Program Type:
Resource Acquisition
Target Group - Size:
Any Size
Target Group - Industry Focus:
Cross Sectoral
in operation
GHG emission source covered:
Natural Gas
Other Energy Sources

Acquire cost effective energy efficiency resources for the State of New York

Program Funding Source:

"Systems Benefits Charge" on consumer electric and natural gas bills, limited funding from other sources.

Total Program Funding:

$275.7 million (2012)

Implementation details

Operating Mechanism:

NYSERDA's state-wide energy efficiency and renewable energy programs, and the private energy utilities operating in the state, are regulated by the Public Service Commission (PSC). (*1)

The New York PSC, under broad authority from the New York State Government, created state-wide energy efficiency targets through an energy efficiency portfolio standard (EEPS) and to authorized NYSERDA and the state's utilities to create the programs needed to achieve those targets.  Most of the state's utilities assess a System Benefit Charge (SBC) on all electricity sales and forward these fees to NYSERDA to fund energy efficiency programs. The utilities use the remaining funds to run their own energy efficiency programs. 

NYSERDA has developed and is operating its programs under budgets designed to meet the PSC established electricity and gas consumption reduction goals.

NYSERDA uses contractors to implement the programs that generate the desired energy savings.

Measurement and verification of results is coordinated by NYSERDA but actual analysis is done by contractors. Results are reported to the PSC.

Program Offerings for Industry:

NYSERDA offers several technical and financial assistance programs for its commercial and industrial customers. Financial assistance is provided in the form of rebates. The amount of the rebate is determined by multiplying a fixed price per unit of energy ($/kWh for electricity and $/MMBtu for natural gas) by a project’s annual energy savings.  The price per unit varies depending upon type and location of project.

Process and Energy Efficiency

  • Electric: $0.12/kWh upstate; $0.16/kWh downstate (*2)
  • Natural Gas: $15/MMBtu up state; $20/MMBtu downstate

Operation & Maintenance (O&M)

  • Electric: $0.05/kWh
  • Natural Gas: $6/MMBtu

Maximum Incentives

  • All projects: 50% of project cost
  • Electric: $5 million/facility/year
  • Natural Gas: $1 million/facility/year

Examples of projects eligible for consideration include but are not limited to:

  • Energy efficient lighting
  • High efficiency motors
  • Variable speed drives
  • High efficiency heating, ventilating and air conditioning (HVAC)
  • Combined heat and power (CHP)
  • Scrap reduction
  • Throughput increases
  • LEAN & Six Sigma projects

NYSERDA is very active in workforce development, energy efficiency education, and helping customers to identify energy savings opportunities. NYSERDA does not have an active program assisting manufacturers to implement Energy Management Systems (EnMS) at this time.

The PSC has not approved any options for large industrial customers to self-direct any of their energy efficiency funds.

Supervising Entity:
New York Public Service Commission
Implementing Entity:
Implementing Entity Type:
Public Institution or Agency
M&V requirements on industry:

Impact Evaluation activities involve visiting sites of large energy efficiency projects and taking pre- and post-project measurements to determine the actual savings achieved compared to what was calculated. This "realization rate” is then applied to the gross estimated savings to get a more accurate account of energy savings achieved.

A Process Evaluation seeks to address industry-specific concerns relating to energy efficiency verification. This includes assessing the effectiveness of outreach, program operations, identifying reasons for industry participation and measure implementation. It also makes recommendations for program improvement.

Market Characterization assessments are completed every other year to determine emerging market factors and help establish a baseline of technology and practice uptake.

Evaluation of Program:
NYSERDA uses two cost effectiveness tests for its programs. The total resource cost (TRC) test presents the ratio of the present value of benefits to total program and implementation costs. The program administrators cost (PAC) test is similar to the TRC, but uses only the costs to the Program Administrator. Both tests can be evaluated considering a variety of benefits. The base benefit is avoided resource cost (the cost to generate the avoided energy), but the test can also include non-energy benefits (such as comfort, safety, and productivity), and macro-economic benefits due to energy bill savings being spent elsewhere in the New York economy.

Program flow chart

Program Flow Chart

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Impacts and Results

PSC issued rulings in 2008 and 2009 adopting the goals of reducing projected electricity consumption by 15% state-wide by 2015 and natural gas 15% by 2020. 759 GWh electricity, 2.3 million Btu fuel (*3) (2011)
Analytic base for target (or target setting mechanism):

PSC set a goal to reduce electricity consumption by 15% by 2015 and natural gas consumption by 15% by 2020 based on an energy efficiency potential study performed in 2008.

Savings (recent year):
1107 GWh electricity, 1.7 million Btu fuel (2011)
Savings (program total):
Not reported
Savings (share of overall demand):
Not reported
Average unit cost of energy saved:

Not reported

Non-energy benefits (co-benefits):

Not reported

Other useful information


(*1) While the PSC makes the final decisions on rules affecting NYSERDA and the utilities, it is supported by staff from the Department of Public Service (DPS), which is part of the executive branch of the government.

(*2) The New York City metropolitan area is known as “downstate” and the balance of the state is known as “upstate”. 

(*3) Primarily natural gas, but includes petroleum fuel oil as well