Report Reveals Unusual EE Market Pattern

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By Elisa Wood

“Big dogs eat first” is a phrase often used to describe energy markets. That is, expect large energy consumers – usually manufacturers — to be the first at the plate to take advantage of any economic benefits. But a recent report suggests that when it comes to energy efficiency, householders may nudge the Mastiffs out of the way.

The American Council for an Energy-Efficient Economy found that in divvying up EE investment dollars, the US home makes up a disproportionate share. Specifically, appliances and electronics made up 48% of the $178 billion spent on buildings in 2004. Yet these devices represented only 8% of the energy consumed by buildings. Meanwhile, the industrial sector received only 25% of EE investment dollars even though these businesses use up 34% of our energy.

The report “The Size of the U.S. Energy Efficiency Market: Generating a More Complete Picture,” noted that this phenomenon is curious. We agreed, and contacted the authors for their insight into the cause.

Karen Ehrhardt-Martinez, co-author with John A. “Skip” Laitner, attributed the unusual pattern to the fact that homeowners now change out their appliances and electronics more frequently. They are not necessarily looking for greater efficiency, but more likely better performance or aesthetics. She cited computers as an example. Large advancements occurred in a relatively short period of time, resulting in out-of-date equipment over the short-run that people seek to replace. New appliances and electronics also happen to be more efficient, in line with government and industry standards.

So without trying, the average person contributed significantly to EE, avoiding the need for about 40 mid-sized coal-fired power plants during the one year the report analyzed. This “invisible” nature of EE, discussed in the report, may be one of its largest benefits. Consumers can take advantage of EE with little effort on their part.

Much hoopla is made about windmills and solar panels these days. While they are clearly a valuable part of the energy supply, they have not met 75% of our new energy demand since 1970, as EE has. Given its silent clout, EE may deserve its own new energy market catch-phrase: Big dog barks quietest.

Visit energy writer Elisa Wood and pick up her free Energy Efficiency Markets newsletter and podcast at www.realenergywriters.com

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Elisa Wood About Elisa Wood

Elisa Wood is the chief editor of MicrogridKnowledge.com. She has been writing about energy for more than two decades for top industry publications. Her work also has been picked up by CNN, the New York Times, Reuters, the Wall Street Journal Online and the Washington Post.

Comments

  1. The “invisible” nature of EE, as noted in the article is attributable to codes and standards – and it is through more rigorous attention to this that we will see the more significant reductions in consumer demand for energy.

    The problem we face is the increased demand for a growing list of energy consuming products – and the religation of older products to another room in the home. (the older refrigerator to the basement, the computer and TV to the “spare” room. And even if it is rarely used – the standby power is significant!) Consumers have to understand that their actions directly contribute to global warming and how they use energy is critical to our ability to be sustainable in the long run.

    The IEC has formed a strategic working group to encourage the adoption of more EE in the design of new products. EE is now a priority with the IEC. While the EU market is different than that of North America we must pay close attention to how they are dealing with this issue.

    The Canadian Standards Association (CSA) is also encourging greater EE in Standards development.

    One of the greatest challenges we face is the incorporation of EE in building codes. An EE home can have an 30% greater effeciency … and that is for a “product” that will likely consume energy for the next 100 years!

    Consumers will make the greatest contribution to EE as new products and homes are built … and they won’t even know they’re doing the right thing. Industry on the other hand will realize that to be competitive the MUST be EE … we see how EE is being used as a marketing tool. P&G, Whirlpool, Walmart, Sears … are all major players in the EE game …

    thanks for the opportunity to ramble on about a subject that is so important to us all …

    Ken Elsey
    President
    Canadian Energy Efficiency Alliance.

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