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Impact of Incentives: Driving Demand for Efficient Products Steven Nadel ACEEE

Impact of Incentives: Driving Demand for Efficient Products Steven Nadel ACEEE. Incentives. Commonly used by utilities and states to promote energy-efficient equipment Designed to save energy (electricity or natural gas) since energy savings less expensive than new energy supplies.

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Impact of Incentives: Driving Demand for Efficient Products Steven Nadel ACEEE

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  1. Impact of Incentives: Driving Demand for Efficient ProductsSteven NadelACEEE

  2. Incentives • Commonly used by utilities and states to promote energy-efficient equipment • Designed to save energy (electricity or natural gas) since energy savings less expensive than new energy supplies. • Incentive covers part of the extra cost of an efficient product relative to a conventional product • Some state incentives for wood stoves – see http://www.forgreenheat.org/incentives/state.html • Very few utility incentives

  3. Incentive Example Source: Howard Geller, Proceedings of the 1986 ACEEE Summer Study on Energy Efficiency in Buildings

  4. Federal Consumer Tax Incentives • To consumers for purchase of efficient heating, cooling and water heating equipment, windows and insulation • To builders for efficient new homes • To manufacturers for efficient new appliances

  5. HVAC Incentives • $300 for efficient equipment, expires 12/31/11 • 95% AFUE natural gas and oil furnaces and boilers • SEER 16 central air conditioners • Wood stoves and boilers with a 75% efficiency • Only a small minority of central AC and oil/gas heating systems quality – minimizes “free riders” • Most wood equipment qualifies

  6. Market Transformation for RefrigeratorsInteraction of Standards, Energy Star & Tax Incentives

  7. Market Transformation for Clothes WashersInteraction of Standards, Energy Star & Tax Incentives

  8. Impact of HVAC Incentives Source: AHRI 2011

  9. Energy Star Window Market Share Source: ACEEE/ASE of window retailers and installers, May 2011

  10. Conclusions • Incentive amounts, marketing and ease of use all important • Federal tax incentives for highly efficient equipment have generally increased market share significantly and have had only modest levels of free riders • For products in which majority of equipment on the market qualifies, free rider levels are high • For wood stoves and boilers, if incentives are extended, qualification levels should be tightened substantially to reduce free riders

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