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

Recommendation
Energy efficiency programs should not be screened at the measure level, because this is
overly restrictive and ignores the important interactions between measures, especially
the fact that some measures that might not be cost-effective on their own but might
nonetheless have important benefits in terms of encouraging customers to participate in
programs or adopt other measures.
As noted above, we recommend that energy efficiency programs be screened at the
program level using the TRC test or the Societal Cost test, and that the entire portfolio of
programs be screened using the PAC test. This allows regulators to balance the goal of
achieving key public policy objectives (through the use of the TRC test or the Societal
test), with the goal of ensuring a net reduction in costs to customers (through the PAC
test).
When energy efficiency contractors screen efficiency measures in the field, the
Participant Cost test should be used, to provide the customer with relevant information
regarding which measures to adopt. The TRC test should not be used for field screening
energy efficiency measures.
Illustrative Example
Figure 5.3 presents cost-effectiveness at the program level, sector level, and portfolio
level for our example New England utility. While each screening level indicates that the
energy efficiency activities are robustly cost-effective, the figure demonstrates that
programs or sectors with lower cost-effectiveness can be absorbed by programs or
sectors that are more cost-effective. For example, the low-income sector has a benefitcost
ratio of about 2.6, while the residential sector has a benefit-cost ratio of about 4.7,
and the C&I sector has a benefit-cost ratio of about 3.5. On average, at the portfolio
level of screening, the sectors produce a benefit-cost ratio of about 3.7.
Figure 5.3. Cost-Effectiveness at Different Screening Levels
Source: The 2012 energy efficiency plan for our example utility, with modified assumptions.
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