Decomposing the Wedge between Projected and Realized Returns in Energy Efficiency Programs Articles uri icon

authors

  • Christensen, Peter
  • Francisco, Paul
  • Myers, Erica
  • NOGUEIRA MEIRELLES DE SOUZA, MATEUS

publication date

  • August 2021

start page

  • 1

end page

  • 46

International Standard Serial Number (ISSN)

  • 0034-6535

Electronic International Standard Serial Number (EISSN)

  • 1530-9142

abstract

  • Evaluations of energy effciency programs reveal that realized savings consistently fall short of projections. We decompose this ‘performance wedge" using data from the Illinois Home Weatherization Assistance Program (IHWAP) and a machine learning-based event study research design. We find that bias in engineering models can account for up to 41% of the wedge, primarily from overestimated savings in wall insulation. Heterogeneity in workmanship can also account for a large fraction (43%) of the wedge, while the rebound effect can explain only 6%. We find substantial heterogeneity in energy-related benefits from IHWAP projects, suggesting opportunities for better targeting of investments.

subjects

  • Economics

keywords

  • energy effciency; weatherization assistance program