Do Energy Efficiency Investments Deliver? Evidence from the Weatherization Assistance Program

Meredith Fowlie, Michael Greenstone and Catherine Wolfram

No 21331, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Conventional wisdom suggests that energy efficiency (EE) policies are beneficial because they induce investments that pay for themselves and lead to emissions reductions. However, this belief is primarily based on projections from engineering models. This paper reports on the results of an experimental evaluation of the nation’s largest residential EE program conducted on a sample of more than 30,000 households. The findings suggest that the upfront investment costs are about twice the actual energy savings. Further, the model-projected savings are roughly 2.5 times the actual savings. While this might be attributed to the “rebound” effect – when demand for energy end uses increases as a result of greater efficiency – the paper fails to find evidence of significantly higher indoor temperatures at weatherized homes. Even when accounting for the broader societal benefits of energy efficiency investments, the costs still substantially outweigh the benefits; the average rate of return is approximately -9.5% annually.

JEL-codes: Q4 Q48 Q5 (search for similar items in EconPapers)
Date: 2015-07
New Economics Papers: this item is included in nep-ene, nep-env and nep-reg
Note: EEE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (55)

Published as Meredith Fowlie, Michael Greenstone, Catherine Wolfram; Do Energy Efficiency Investments Deliver? Evidence from the Weatherization Assistance Program, The Quarterly Journal of Economics, , qjy005, https://doi.org/10.1093/qje/qjy005

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Journal Article: Do Energy Efficiency Investments Deliver? Evidence from the Weatherization Assistance Program (2018)
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