Measuring Efficiency

Posted by Rick Barnett on January 03, 2017
Measuring Efficiency

“Saving” can be defined as setting something aside for use in the future, such as depositing money into a savings account. With electricity, despite widespread claims of saving, only a battery saves energy for use in the future. A consumer isn’t assured anything about future energy bills after installing an “energy saving” product, such as an LED or Energy Star appliance. Since energy is measured through a single meter, it’s impossible to determine the impact of using individual products.

For example, after being credited for reducing energy consumption, an LED may never be installed. Or the bulb may be left on accidentally and burn out. Clearly in these examples, the product isn’t saving anything. Efficiency products offer an opportunity to reduce demand, but success is determined by the product’s use.

Efficiency is about making something NOT happen and doesn’t lend itself to direct measurement. The issue was succinctly presented in a 2014 Global Superior Energy Performance Partnership report: “energy data in buildings and industrial sectors are of limited availability and, often, poor quality. This insufficiency is an ongoing obstacle to tracking and assessing the progress of energy efficiency improvements. Because savings represent the absence of energy use, it is impossible to directly measure energy efficiency impacts”.

Without measurement, efficiency products dispensed through utilities and public agencies are credited for saving energy through a calculation.

One method is conveyed by EPA: “With energy efficiency programs, the key metric of interest is energy savings. This quantity cannot be directly measured. Instead, efficiency program impacts are estimated by taking the difference between:

a) Actual energy consumption after efficiency measures are installed
b) What energy consumption would have occurred during the same period had the efficiency measures not been installed (i.e., the baseline)

In addition, steps can be taken to adjust the baseline and/or the post-installation energy use to account for factors other than the energy efficient measure or system that affect energy consumption (e.g., weather, building occupancy, operating hours). Energy savings are therefore determined using the equation:

Energy savings = (b)(Baseline energy use) — (a)(Post-installation energy use) ± (c)(Adjustments)”

ASHRAE’s “Guideline 14-2002 for Measurement of Energy and Demand Savings” describes a savings calculation that is also a comparison: “the absence of energy use or demand can be calculated by comparing measurements of energy use and/or demand from before and after implementation of an energy conservation measure”. The guideline also notes: “There is no direct way of measuring energy use or demand savings since instruments cannot measure the absence of energy use or demand”. Thus, “before and after” usage data is required to calculate savings via EPA or ASHRAE.

New “high efficiency” products are marketed as saving an amount of energy determined through manufacturer testing. Based on these energy saving claims, efficiency program administrators and regulators have adopted a convention for program evaluation based on the amount of money spent to dispense efficiency products.

The Lawrence Berkeley Lab’s 2015 report, “Total Cost of Saving Electricity through Customer-Funded Energy Efficiency Programs”, evaluates data from over 500 efficiency programs with this formula:

Total cost of saved energy = 

With this convention, “cost-effectiveness” is the primary concern, and a larger budget is assumed to save more energy because more efficiency products are dispensed (i.e., every dollar spent on an efficiency program saves an accepted amount of energy). Calculated program savings are then used as credit for meeting state and federal energy goals.

The difficulty of evaluating programs that employ the savings convention was noted in EIA’s 2014 report: “Energy efficiency program budgets have rapidly expanded, and in many states program budgets now approach supply-side capital investment in scale. But the high variability of energy efficiency programs, the lack of lengthy track records, and the difficulty of measuring their benefits make analyzing these programs challenging, particularly in comparing them across states or across energy service areas.”

Calculated savings is unable to account for the huge variability in product use. If a consumer buys a “high-efficiency” TV, but it’s larger and used more, “saved energy” credit for purchasing the TV becomes speculative. If a consumer buys an Energy Star refrigerator as a “back up” in the garage, the purchase would increase the home’s consumption. 

The detachment from a product’s use deserves some attention because current programs are not achieving their goal of reducing demand. In fact, demand has increased steadily since 1950, according to EIA’s 2016 data.

The problem of growing demand is accentuated in the US, with the highest per capita energy consumption in the world. World Population Balance reports: “Americans make up only 4.5% of the world's population and yet consume nearly 20% of its energy.”

The impact of the savings convention was addressed in research by the academic collaborative E2e through a three-year, 30,000-home study. Using pre- and post-retrofit data, their evaluation of DOE’s Weatherization Assistance Program (WAP) found overstated claims about the effectiveness of WAP’s weatherization measures. E2e concluded that “savings was just 39% of the average savings predicted by engineering models.”

[Editor's note: The E2e study did not take into full account the job creation, job training, and other economic stimulus of the program, or the health and safety benefits; and it focused on a small, non-representative group of weatherized homes. You can read more about the National Weatherization Evaluation here. You can also learn more about the WAP in the following article, "Health and Household-Related Benefits of DOE's WAP".]

In contrast to calculated product savings, one efficiency option employs an efficiency system rather than individual products, and can be measured with performance scoring. The verified impact of “deep energy retrofits” is a more reliable option for expanding efficiency investment to meet future energy needs. The value of high performance is further elevated because it only targets space condition, the largest source of residential consumption.

Organizations that promote high performance thermal systems include the Building Performance Institute, the Home Performance Coalition, Efficiency First, and E4 the Future.

And recently, an idea for a large scale retrofit program that optimizes residential performance was described in this Climate Institute report: The well-documented potential of energy efficiency has been elusive: perhaps this is because very few retrofits include a high performance thermal system that can capture the energy asset in our homes.


Rick Barnett has a B.A. in psychology and an Interdisciplinary Masters in Environmental Management. Before becoming a builder, Rick was involved with recycling, including the initiation of the first campus-wide recycling program in the US, at Oregon State University in 1975.

Rick started Green Builder in 1996, and initiated several public sector green building programs over the next 10 years. As a general contractor, his experience included several rigid-wrapped high performance projects. His current focus is promoting high performance homes. 

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