Midwest Energy Efficiency Alliance. n.d. Non-Energy Benefits of Energy Efficiency. Available at: https://www.mwalliance.org/sites/default/files/media/NEBs-Factsheet_0.pdf
Energy-related program assessments take account of the “non-energy benefits” (NEBs) that place a value on the many and diverse benefits for participants in energy efficiency programs beyond energy savings. Three-quarters of energy efficiency project benefits can come from NEBs including reduced energy burden for low-income residents, improved health and wellbeing, and a reduction in societal costs from air pollutants from fossil-fuel burning.
Regulators and utilities assess the cost-effectiveness of their energy efficiency programs by comparing the benefits of the program to the cost of delivering those programs. Forty states, including Texas, Florida, Ohio, and Pennsylvania, use cost-benefit tests that do not incorporate NEBs. The remaining 18 continental U.S. states that do incorporate NEBs, such as California, Massachusetts, and Washington, face challenges in quantifying NEBs. One difficulty is determining whether benefits are specific to the energy efficiency program itself, or whether they are caused by a different activity. For example, asthma incidences may be reduced by the reduction in energy derived from pollutant-emitting fossil fuels such as coal. But other initiatives, such as reducing exposure to tobacco smoke or mold, can also contribute to this reduction in asthma prevalence but which then cannot count as a NEB.
Further, reported monetization values for individual NEBs vary, due to different methods and assumptions used as well as differences in households, climate, and programs. Values may differ based on whether NEBs are included in a cost-benefit analysis:
As an adder, which is a dollar or percentage value added to energy benefits;
Using quantification, or the inclusion of money values for NEBs that can be quantified, such as a reduction in ratepayer costs; or
As a hybrid of both an adder and quantification, where an adder represents certain NEBs and quantification is used for others.
Regardless of the method used, accounting for NEBs in state policy and utility planning allows for the full potential and opportunities of energy efficiency programs to be captured.
