SACE | Southern Alliance for Clean Energy

Energy efficiency is the cheapest solution


Energy efficiency is the cheapest solution to our energy and global warming challenges.

Leading energy efficiency programs across the country deliver energy savings to customers at a cost of 2 to 4 cents per kilowatt-hour. In contrast, new power plants cost at least 10 cents per kilowatt-hour. For specifics, see Lazard’s Levelized Cost of Energy Analysis.

Unlike conventional power sources, energy efficiency isn’t sensitive to price spikes because it doesn’t require fuel. Also, because it doesn’t require fuel, it is 100% effective in reducing global warming pollution.

In 2014, there were many reports that reviewed and analyzed the cost of energy efficiency. The American Council for an Energy Efficiency Economy released a report that found that the average cost of saving a kilowatt-hour with energy efficiency is 2.8 cents, and efficiency continues to be the least cost resource. The Lawrence Berkeley National Lab released a report that used data from more than 1,700 programs to evaluate the cost of saved energy. LBNL found that, nationally, the average cost of saving a kilowatt-hour is 2.1 cents. Ceres updated their 2012 report, Practicing Risk-Aware Electricity Regulation, which again found that energy efficiency is the least cost and least risky energy resource. Finally, in December 2014, The Analysis Group released an assessment of the EPA’s Clean Power Plan energy efficiency costs that found that several utilities achieved their efficiency savings below their estimated cost.

As a representative example, SACE’s analysis of utility and government data indicates that in North Carolina, energy efficiency has the potential to reduce global warming pollution by:

  • Over 30% from electricity
  • Over 20% from natural gas
  • Over 40% from cars and trucks

Graph: Reducing North Carolina's Global Warming Pollution by 60 Percent

Achieving these goals will require the collective action of individuals, businesses, governments, and especially energy utilities. As we begin to make progress, we can delay or cancel costly (and unnecessary) investments in new power plants.

In sum, energy efficiency is the cleanest and most cost-effective way to reduce greenhouse gas emissions and other pollutants associated with power generation, while also strengthening the Southeast’s economy, improving its energy security and reducing costs for consumers.