EIA: US electric utilities spent $3.6 billion on energy efficiency customer incentives in 2016

U.S. electric utilities spent $3.6 billion on energy efficiency customer incentives in 2016, or an average of $24 per customer, a recent U.S. Energy Information Administration (EIA) survey found.

EIA’s survey of electric power sales, revenue, and energy efficiency (EIA-861) found that 43 percent of spending targeted residential customers, 49 percent targeted commercial customers, and 8 percent targeted industrial customers.

Average spending per customer varied by state, ranging from $0 in Alaska to $128 in Massachusetts. By U.S. census region, utilities in the South spent an average of $11 per customer, while utilities in the Northeast spent $47 per customer. Spending was also higher in certain states with high electricity prices and in certain states with climates that necessitate more energy for heating and cooling.

Incremental savings due to energy efficiency spending for 2016 totaled 27.5 billion kilowatt hours or 0.7 percent of nationwide retail electricity sales.

Projected life cycle savings were much higher at 354 billion kilowatt-hours over the lifetime of the efficiency measures used, because some measures provide benefits for several years.

Annual incremental savings varied by state, ranging from nearly 0 percent of electricity retail sales in Kansas and Alaska to 3 percent in Massachusetts and Rhode Island. By U.S. census region, average electricity savings were the highest at 1.2 percent in the Northeast and the lowest at less than 0.4 percent in the South.

The presence of state energy efficiency initiatives impacted the energy efficiency spending and savings of utilities in those states. In those with mandatory energy efficiency resource standards (EERS), utilities spent $31 on incentives per customer and saved one percent of retail electricity sales on average in 2016. Utilities in states with non-binding goals or pilot programs spent an average of $15 per customer and saved 0.5 percent of retail sales. Utilities in states with no energy efficiency goals spent $12 per customer and saved 0.4 percent of retail sales.