Editorial: Energy Efficiency Advice to the Next Administration

As I write this editorial in early October, the outcome of the election remains uncertain. That’s just fine, because it allows me to offer early advice to whichever candidate wins. Here are some recommendations based on my years with Home Energy.

The government plays an important role in lowering energy demand. If Americans expect the government to establish policies to regulate natural-gas fracking and power plant emissions, then it should also address energy efficiency. The opportunities for energy efficiency may look small individually, but they add up quickly, when 4% of national energy is consumed by water heaters and 6% by home air conditioners. Amazingly, roof racks on cars alone—which have terrible aerodynamics—add 2% to the nation’s gasoline bill.

Get the energy price right. A sustained investment in energy efficiency and the incentive to conserve energy requires constant prodding. That prodding can take place through energy bills. The price of energy must reflect all the costs of energy production and consumption, from the cost of installing scrubbers to the cost of long-term storage of waste. And we should strive to make sure that the people who pay for the energy are also the ones responsible for investments in energy efficiency. Problems such as the split incentive between landlord and tenant—where the tenant pays for electricity and the landlord is responsible for any home improvements that could increase the efficiency—abound in our economy and lead to insufficient investment in efficiency and excessive energy use.

Acknowledge that some people won’t ever be able to pay their energy bills, and deal with it. The government—at some level—is responsible for the welfare of its citizens, so we need to deliver a minimum level of services. But it would be silly to subsidize energy bills to inefficient homes; that’s why a weatherization program still makes sense.

Get your own house in order. The federal government is the country’s largest energy consumer, and even after it has made significant efforts to increase the efficiency of its offices and buildings, there remains much energy to be saved. There’s a good argument that the government should set an example. Indeed, the armed forces are leading the charge to increase efficiency and to install renewable energy sources.

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Undertake and support research and development of energy efficiency technologies. It’s amazing how often the private sector overlooks promising areas of research and development that would lead to profitable new products and services. This is especially true in the energy efficiency sector. The government certainly has a role to play in long-term research. But it may have a role to play in near-term research as well, given the reluctance (or inability) of the private sector to undertake this. DOE’s highly successful research program to improve solid-state lighting is an example of research and development that delivered on both time scales—in the near term and over the long term.

Reduce the burden of gathering energy-related information. To make an informed decision regarding energy efficiency, it is first necessary to gather information. But gathering information is time consuming and expensive. The need for information ranges from that of an individual trying to choose between two heat pumps to that of a firm—or Congress—trying to understand our nation’s energy consumption patterns. That’s why the government needs to reduce the burden of gathering information—thereby saving everybody money. Think Energy Star. The government verifies the energy efficiency of new products, establishes credible rating schemes, and perhaps should certify professionals. Also, we need the data to know, nationally, how we are doing, in order to promote successful programs and eliminate failures. The federal government is in a good position to gather and analyze that data.

Vigorously enact and extend minimum-efficiency standards and codes. Standards save consumers both energy and money; they’re a national bargain. There’s a reason why nearly every country in the world has adopted minimum-efficiency standards: They simply work. But they must be reinforced with verification, enforcement, and training; governments sometimes forget that.

None of these recommendations is surprising, and it’s still difficult to translate broad pronouncements into specific actions, but the new administration should start with these suggestions. Do you agree? Disagree? Either way, I look forward to receiving your comments.

This article originally appeared in the Nov/Dec '12 issue of Home Energy.

- Alan Meier