Best Practices in Energy Efficiency Program Screening - Synapse ...

to energy savings that occur when a program nonparticipant installs energy efficiency
measures or applies energy savings practices as a result as a result of a program’s
influence. Additional distinctions may also be made to spillover such as “like” or “unlike”
spillover (the former refers to the same measure as the program, while the latter refers
to other actions taken as a result of program participation) and “inside” and “outside” of
the project (the former referring to non-incented measures taken within the same project
that had received an incentive while the latter is adoption of non-incented measures in
an unrelated project).”(NMR 2010, page 7)
Market Transformation Program: “An energy efficiency program strategy that leads to a
reduction in market barriers resulting from a market intervention, as evidenced by market
effects that last after the intervention has been withdrawn, reduced or changed.” (NEEP
2009, p.22)
There is also another factor called “rebound” effect that influences the net energy
savings. The rebound effect describes an effect where consumers increase the level of
energy service due to lower cost of energy usage resulting from more energy efficient
measures. Our study will focus on free-rider and spillover and will not discuss the
rebound effect in our study for two reasons. First, the literature on this topic indicates
that the rebound effect from energy efficiency programs is minimal (Synapse 2011a;
Nadel 2011; Ehrhardt-Martinez and Latiner 2010). Second, historically free-rider and
spillover effects have been the major focus on net savings.
Current Practice
Recent surveys by NMR (2010), ACEEE (2012), and LBNL (2010) revealed the
“operational” definitions and methods for measuring net savings are different by
jurisdiction. In general, the surveys found that some states only include free-ridership,
some states include both free-ridership and spillover, and some states do not include
either (See Table 4.2). Many states adjust for free ridership, but a fewer states adjust for
spillover. Even where spillover is used, it is limited to a few cases in some states.
ACEEE makes the following points:
In current practice, substantial differences exist among states in things like the
treatment and measurement of free riders, spillover, net savings, deemed
savings, and non-energy benefits. These differences make it difficult to interpret
comparisons among states in reported energy efficiency results, and preclude
the ability to make true “apples to apples” comparisons. - We explored the net
savings issue in a little more detail, and asked whether states made specific
adjustments for “free riders” and “free-drivers/spillover.” Interestingly, while 28
states (67%) indicated they make an adjustment for free-riders, only 17 states
(44%) make an adjustment for free-drivers/spillover. (ACEEE 2012, p.33).
Aside from what factors are included in net savings measurements, we note that there
are various methods to measure the effect of free-rider and spillover effects or net to
gross savings or ratios, including, but not limited to (a) self-reporting surveys,
(b) enhanced self-reporting surveys, (c) market sales data analysis, (d) historical tracing
(case study method), (d) structured expert judgment, (d) econometric modeling, and (e)
deemed or stipulated estimates (NMR 2010, page 27 – 32; NAPEE 2007, 5-4 – 5-7).
Finding the most appropriate method depends on (1) the structure of the energy
efficiency program; (2) the availability of market sales data and meaningful comparison
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