Renewable Energy

Energy Efficiency Emerges as Power Source in U.S.

A few years ago, when I first wrote about energy efficiency, I got into a fun argument with one of my colleagues.

I said energy efficiency was the fastest-growing “source” of energy that we have.

She was puzzled. She asked me how saving energy could be a source of energy.

Here’s what I said…

In the past, electric utilities would forecast demand based on an increase in their customers. But not anymore. Now they take energy efficiency into account.

When customers increase their energy efficiency, their overall energy use decreases. And that means utilities can delay or eliminate adding new generating capacity.

Today, more folks are taking positive steps to increase their energy efficiency.

Take your refrigerator, for example.

Out of the 170 million refrigerators in use today here in the U.S., an estimated 60 million are more than 10 years old.

The additional electricity needed to power those 60 million clunkers compared with new ones costs $4.4 billion annually.

Here’s how much power the average size fridge uses based on manufacturing year…

  • 1990: 1,000 kilowatt-hours (kWh) per year
  • 1993: 700 kWh per year
  • 2001: 490 kWh per year
  • 2017: 360 kWh per year.

Based on these numbers, your fridge shouldn’t use more than 2 or 3 kWh per day. If it does, you should consider getting a new one.

Some utilities will even pay customers to replace an old refrigerator.

How can they afford to do this? It’s cheaper to pay customers to save electricity than to build a new power plant.

Remember, they can put off creating more generating capacity if they can reduce the load.

That effectively creates more power capacity.

This trend is playing out all over the U.S. today.

And here is the amazing part: Our economy has continued to grow even though our energy use has leveled off.

In 2017, jobs in energy efficiency sectors jumped 3%. That totaled 67,000 new jobs added last year, for roughly 7% of all new jobs created.

As I argued would happen, energy efficiency has become the third-largest source of electricity in the U.S.

Plus, we have avoided building the equivalent of 313 large power plants.

Remember, this is all happening in the face of a growing economy. And consumers are the big winners.

Our electric bills just continue to drop, and we continue to do more with less energy.

That’s energy efficiency at work.

Good investing,