For this reason, energy efficiency is perhaps the most overlooked resource but energy efficiency is happening just about everywhere – where we live, work, shop, and play.
And the opportunities for energy efficiency savings in Ohio homes, businesses and factories are massive – we can literally never stop improving the efficiency of everything that requires power.
Simply defined, energy efficiency means getting the same amount of services we expect when we use energy – electricity or natural gas in our homes, for example – but using less of it to deliver those same services.
For instance, when we enter a room and flip a switch, we expect the lights to come on. Energy efficiency can deliver the same amount of lighting so that we don’t trip over our desk chair, but uses less energy to help us see clearly around the room.
Energy efficiency is a common sense resource – simply put, it reduces waste in energy systems.
Energy waste is reduced by making our homes, businesses, factories, schools, and government buildings more efficient through the use of more efficient products and through better building efficiencies like adding layers of insulation, upgrading to insulated windows and sealing up drafty areas so that your inside air – either heated or air conditioned – can’t escape.
Energy efficiency creates jobs in a number of ways. First, the jobs associated with weatherizing homes and businesses cannot be exported. Energy efficiency relies on better technologies that we use directly or indirectly everyday: home appliances, computers & laptops, furnaces, air conditioners, insulation, windows, water treatment systems, and all the gadgets that entertain us and our families. Ohio companies are investing everyday in innovation and research into making more energy efficient consumer products.
Ohio’s Energy Efficiency Resource Standard (EERS) – the state’s requirement on electric utilities to meet a portion of their customer demand through energy efficiency – was established in 2008 with the enactment of Ohio Senate Bill 221.
The standard sets annual energy reduction targets, or benchmarks, for Ohio’s electric utilities starting with 0.3% in the first year and increasing to a modest 2% of base retail sales.
Overall, the standard will reduce 22.5% of Ohio’s electric energy use by the year 2025.
How do Ohio’s utilities – American Electric Power (AEP), FirstEnergy, Dayton Power & Light (DP&L) and Duke Energy – achieve these savings goals?
Primarily, these utilities offer discounts and rebates on energy efficient lighting, weatherization and household appliances. And depending on what kind of customer you are – residential, commercial or industrial – your utility’s energy efficiency programs will offer different incentives on items and systems you use that require electricity. For example:
*CHP is Combined Heat & Power and WER is Waste Energy Recovery.
Since we all pay a utility bill, naturally less energy wasted means less money wasted. Investments in energy efficiency help utility customers in a big way. Consumers pay a little each month on their electric bills that then go into utility efficiency programs.
But even if a customer chooses not to receive direct rebate for a new refrigerator, they still receive indirect benefits of having more energy efficiency as part of a utility’s energy portfolio (the mix of generation resources such as coal, natural gas, wind, solar, etc. and efficiency).
Energy efficiency costs 3 cents per kWh. By comparison, new natural gas power costs 6 cents per kWh or more, traditional coal equals about 11.1 cents per kWh, nuclear power is 12.25 cents per kWh, and biomass resources, geothermal, and wind have average prices of 8.9, 7.55 and 8.5 cents per kWh, respectively.1
Because energy efficiency is the cheapest resource in any energy portfolio it acts as the lead weight on prices, bringing them down and countering the more expensive resources.
In Ohio, for every $1 that a utility spends on an energy efficiency measure, customers save about $3 on their electric bills. In 2009 and 2010 alone, the programs implemented by Ohio utilities saved enough energy to power 181,000 homes for one year.2
And since 2009, these programs have saved businesses and consumers more than $100 million in utility costs.3
According to Ohio’s law, each utility’s energy efficiency programs must save customers more money than they cost. If program costs ever rise above what it would cost to just build a new power plant, utilities in Ohio would be under no obligation to follow the requirements.
Additionally, Ohio’s law also allows energy-intensive customers – like large manufacturers and industrial companies – to opt-out of energy efficiency charges, but only if they install their own energy efficiency measures.
1 Lazard and Associates, Levelized Cost of Energy Analysis, Version 3.0. February 2009.
2 Based on 1,808,287 MWh of cumulative energy savings and 10 MWh average annual energy use per-home. Ohio Energy Efficiency Savings Fact Sheet, NRDC, et. al., May 2011
3 Energy Productivity in Ohio, NRDC & Ohio Environmental Council, May 2012.