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Cost-effectiveness of energy efficiency programs: How to better understand and improve from multiple stakeholder perspectives?

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  • Yushchenko, Alisa
  • Patel, Martin Kumar

Abstract

Cost-effectiveness analysis is one of the core elements of energy efficiency program evaluation, having important impact on energy policy, program design and budget allocation. In this context two questions arise. How to evaluate cost-effectiveness of energy efficiency programs in a more comprehensive manner? And how to improve the programs’ cost-effectiveness? We evaluate the cost-effectiveness of energy efficiency programs in Switzerland, based on three electricity-saving programs in Geneva. We review the existing practices of cost-effectiveness analysis and propose a somewhat modified methodology that allows considering perspectives of the following stakeholders: program participants, energy consumers, program administrator, utility, geographic jurisdiction territory and society as a whole. We also analyze the cost breakdown of energy efficiency programs and its evolution over time. We find that energy efficiency programs can contribute to energy efficiency target achievement while having positive economic and social impacts, including increased GDP and employment. However, energy efficiency programs can potentially lead to increased energy tariffs and higher costs for utilities. As policy recommendations for increasing cost-effectiveness of energy efficiency programs we propose a larger scale of energy efficiency programs, focus on education and training as well as on the development of long-term relationships with program participants and contractors.

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  • Yushchenko, Alisa & Patel, Martin Kumar, 2017. "Cost-effectiveness of energy efficiency programs: How to better understand and improve from multiple stakeholder perspectives?," Energy Policy, Elsevier, vol. 108(C), pages 538-550.
    • Handle: RePEc:eee:enepol:v:108:y:2017:i:c:p:538-550
    DOI: 10.1016/j.enpol.2017.06.015
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