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

educe a program’s overall cost-effectiveness, the program administrator may be able to
achieve greater overall savings through the combination of measures. Additionally, a
measure may not be cost-effective on its own, but may become cost-effective when
combined with other efforts. 32 (NAPEE 2008, pp.3-9, 3-10).
Evaluating cost-effectiveness at the portfolio level means that all of the programs taken
together must be cost-effective, but individual programs can be positive or negative.
This is the most flexible application of cost-effectiveness testing, as program
administrators have the ability to experiment with different strategies and technologies
that may not be immediately cost-effective or require further testing, such as pilot
programs, market transformation programs, or emerging technologies. (NAPEE 2008,
pp. 3-9, 3-10).
A recent ACEEE report surveyed states on the level at which program administrators
screen for cost-effectiveness. The most prevalent responses to the question of “what
level” the benefit-cost tests are applied were: the “portfolio” level (30 states, 70%) and
the “program” level (30 states, 70%), although nearly half of those states noted that they
had some expectations at the program level (e.g., low-income programs, pilot programs,
etc.) where the benefit-cost test was not required or waivers were granted. Thirteen
states (30%) applied their benefit-cost test requirements at the measure level, and a
majority of those states provide exceptions for things like low-income programs and/or
situations where measures can be bundled together into a cost-effective package of
measures (e.g., certain “whole house” type programs). (ACEEE 2012, p.31).
Finally, it is important to note that in addition to screening energy efficiency programs for
planning purposes, it is also possible to screen energy efficiency programs at the point
of implementation, i.e., “field screening.” Field screening can be applied during the
process of auditing homes and businesses for retrofits, and may be important to provide
customers with assurance that certain efficiency measures will be appropriate to the
unique conditions of their building. The best test to use in field screening is the
Participant Cost test, because this test indicates which efficiency measures the customer
should adopt and what the customer benefits of those measures will be.
The TRC test should not be used for field screening energy efficiency measures, for
several reasons. First, it is especially difficult to properly account for other program
impacts at the measure level for each building; and without the OPIs the TRC test will be
skewed against the energy efficiency measures. Second, measure level field screening
does not account for the interactions between measures, particularly the benefits that
one measure might have in encouraging customers to adopt other measures. Third,
experience has demonstrated that measure-level field screening is overly restrictive, can
exclude measures that are cost-effective to customers, increases the transaction costs
of contractors and customers, creates lost opportunities, and hinders the goal of
achieving comprehensive, whole-house efficiency savings.
32 Summing up the benefits of multiple measures at the program level may require some adjustment for
what are known as “interactive effects” between related measures. Interactive effects occur when
multiple measures installed together affect each other’s impacts. When measures affect the same end
use, their combined effect when implemented together may be less than (or more than) the sum of each
measure’s individually estimated impact. (ACEEE 2008, p.3-10).
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