The cheapest kilowatt-hour is the one that’s not used.
It’s long been known that reducing electricity use through efficiency is cheaper than having to generate more power to meet rising demand. A report from the American Council for an Energy-Efficient Economy puts numbers behind that claim.
According to the council, energy efficiency costs two to three times less than generating power through newly developed traditional sources. It pegs the average cost of energy efficiency measures at only 3 cents per kWh.
“Why build more expensive power plants when efficiency gives you more bang for your buck?” said Maggie Molina, author of the council’s report. “Investing in energy efficiency helps utilities and ratepayers avoid the expense of building new power plants and the harmful pollution that plants emit.”
The report looked at the cost of running efficiency programs in 20 states from 2009 to 2012 and found an average cost of 2.8 cents per kWh. Each dollar invested in electric energy efficiency yielded $1.24 to $4 in total benefits for customers, including avoided energy and capacity costs, avoided costs from building new power lines, and reduced pollution.
“Incorporating higher levels of energy efficiency in long-term planning can protect utilities and their customers against volatile and rising costs of traditional energy resources,” the council added.