Whether you consider energy efficiency the “world’s first fuel,” a sure way to save consumers money, or “negawatts” to build instead of new generation capacity, there’s no dispute reducing power demand is an economic and environmental win – and in America, there’s no bigger winner than Massachusetts.
The American Council for an Energy-Efficient Economy’s (ACEEE) 8th annual State Energy Efficiency Scorecard, released today, shows policymakers in most states are taking action to cut energy demand, with Massachusetts retaining its crown as the most energy-efficient state for a remarkable fourth consecutive year.
But while Massachusetts may lead the way, it’s not alone in cutting power use, consumer bills, and emissions. 16 states rose in ACEEE’s energy efficiency rankings, and total electricity efficiency program hit $6.3 billion in funding for 2013, saving 24.3 million megawatt hours (MWh) – a 7% increase over 2011.
Massachusetts, California Top U.S. Energy Efficiency Ranks
ACEEE credits Massachusetts’ Green Communities Act of 2008 for its continued success. The act requires utilities to save an increasing percentage of energy every year through efficiency, which has spurred investments and achieved electricity savings of more than 2% total utility sales. ACEEE gave the state a perfect score for utility efficiency policies and programs, and also noted strong showings in building energy codes as well as combined heat and power (CHP) policy.
California ranked a close second for the fourth consecutive year, unsurprising given its dominance over America’s clean energy economy. ACEEE awarded the Golden State a perfect score in building energy code stringency and compliance, and led the country in transportation efficiency as well as appliance standards. With an ambitious zero-emission vehicle goal and the first U.S. appliance efficiency standards, it’s easy to see the connection between smart policy and clean energy economic growth.
Mainly Winners, But Some Efficiency Losers Across America
Vermont, Rhode Island, and Oregon all improved on last year’s results to tie for third place in this year’s ranking, followed by Connecticut, New York State, Washington State, Maryland, and Minnesota to round out the top ten on the strength of stable policy. These states regularly finish among the most efficient, so it’s also worth noting the four most-improved states.
Arkansas, Washington D.C., Kentucky, and Wisconsin showed the best efficiency improvements in 2013 while demonstrating energy efficiency works regardless of location. Arkansas increased its electric efficiency budgets 30% and tripled savings, while D.C.’s Sustainable Energy Utility program helped it rise nine spots – the most of any location.
Indeed, energy efficiency could have the biggest impact on some of the most traditionally “dirty” energy states – Kentucky and Arkansas are among the Southeast U.S. states enjoying a 387% return on investment from efficiency programs. “We’re happy to see the regional diversity of states moving up the rankings, proving that energy efficiency has been embraced across the country,” said Annie Gilleo, ACEEE analyst.
Unfortunately, the news wasn’t good across America. 23 states fell in the energy efficiency ranks, led by Indiana and Ohio, where state legislators took action to reverse existing efficiency goals. Indiana dropped 13 spots, the most of any state, largely due to its decision to eliminate the state’s long-term energy efficiency goals. Ohio fell seven spots after state policymakers froze the state’s existing energy efficiency resource standard and weaken its long-term targets.
Five Steps To Energy Efficiency Success
While Indiana and Ohio took significant steps back, many states fell in ACEEE’s ranking simply because they didn’t improve compared to their peers. So what policy steps can governments take to keep moving toward a clean energy economy?
ACEEE outlines five strategies: Establish and fund an energy efficiency resource standard (EERS), adopt stringent building energy codes and compliance, set stringent vehicle emissions standards and targets for reducing vehicle miles traveled, treat CHP as an equal energy efficiency resource, and expand visibility for state-led efforts.
Of the four, energy savings targets like EERS create the most investment and policy certainty. The 26 states with EERS policy in place created a staggering 85% of America’s 20 million MWh of energy efficiency savings in 2012, and could save 6.2% of total U.S. electricity sales by 2020.
But if EERS may have the largest energy savings potential, stringent building codes may have the highest cost savings upside. Buildings use 40% of all energy consumed in America, and a recent estimate from the Institute for Market Transformation estimated bringing one year’s worth of new construction to full compliance would save $189 million, with lifetime savings of up to $37 billion for five years’ worth of new buildings.
Policymakers Choose: Move Forward, Or Fall Behind
The energy and economic savings potential of efficiency, as well as a path to success, is clear. All that’s left is for policymakers to decide if they want their states to move forward or backward.
“More and more governors and state lawmakers understand they have a choice – do nothing as costly energy is wasted or take action by creating incentives to waste less energy,” said Maggie Molina, ACEEE Policy Director. “State action on energy efficiency improves bottom lines, drives investment across all sectors of the economy, creates jobs, and offsets the environmental harms created by energy production.”
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