Don’t Waste Money on Energy Efficiency Upgrades, According to Study

by K.T. Weaver, SkyVision Solutions 

A new study finds that even when accounting for the broader societal benefits of energy efficiency investments, the costs still substantially outweigh the benefits. [1][2]

Green Home and Saving Environment with SMFrom the abstract of the study:

“Conventional wisdom suggests that energy efficiency (EE) policies are beneficial because they induce investments that pay for themselves and lead to emissions reductions.  However, this belief is primarily based on projections from engineering models.”

“This paper reports on the results of an experimental evaluation of the nation’s largest residential EE program conducted on a sample of more than 30,000 households.  The findings suggest that the upfront investment costs are about twice the actual energy savings.  Further, the model-projected savings are roughly 2.5 times the actual savings.”

“Even when accounting for the broader societal benefits of energy efficiency investments, the costs still substantially outweigh the benefits; the average rate of return is approximately -9.5% annually.”

Based upon the above real-life evaluation results, as compared to engineering model projections, customer energy bills did not decline nearly enough to eventually pay for the initial cost of the upgrades.

“The models project much larger savings than are realized by homeowners,” said Michael Greenstone, an energy economist and head of the Energy Policy Institute at the University of Chicago.  Surprised at the results, Greenstone adds, “The problem is that the real world is screwy.”

As concluded by the newly released paper:

“The paper fails to find evidence of economically or statistically significant increases in indoor temperature at weatherized homes.” 

“From a policy perspective, a WAP [Weatherization Assistance Program] does not appear to pass a conventional cost-benefit test …” 

“On the broader question of optimal climate change policy, this paper’s findings indicate that residential energy efficiency retrofits are unlikely to provide the least expensive carbon reductions.”

The study findings undermine the rationale for billion-dollar federal and state efficiency programs and call into question a long-held understanding that making existing homes and businesses more energy-efficient are among the cheapest ways to reduce emissions of carbon dioxide.

There is an important lesson here on the subject of smart meters.  As customers are charged increased rates for installation of smart meters to collect their finely detailed personal usage data, they are told to make energy efficiency improvements in an attempt to offset the cost of the smart meter installations.  The newly released study shows this will only lead to more wasted money … and disappointing results for helping the environment as well.

Obviously if your home has structural issues with old wooden window frames that are rotting, etc., there are times when it makes sense to make the appropriate repairs.  Just don’t be duped by those telling you that tracking your smart meter data combined with energy efficiency upgrades will help you save money in the long run or help the environment.  It won’t since we live in the “real world” versus the virtual world of biased computer models.  Plus, there is no need to have a smart meter in order to know when it is time to make home repairs or turn off the lights.


[1]  “Study says many home efficiency upgrades don’t pay off,” at

[2]  “Do Energy Efficiency Investments Deliver? Evidence from the Weatherization Assistance Program,” by Meredith Fowlie, Michael Greenstone, and Catherine Wolfram; June 2015.  Link for Paper:  Wasting Money on Energy Efficiency Upgrades_paper_06_15

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About SkyVision Solutions

Raising public awareness and finding solutions for smart grid issues related to invasions of privacy, data security, cyber threats, health and societal impacts, as well as hazards related to radiofrequency (RF) radiation emissions from all wireless devices, including smart meters.
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