Identifying Promising Programs
This subtopic will help you understand the economic tests commonly used to assess the costs and benefits of different program options and compare their relative merits.
The guides here will walk you through simple calculations that you can use to analyze cost- effectiveness from the point of view of the utility, program participants and non-participants, and society as a whole. Because these stakeholders incur different costs and realize different benefits from energy efficiency programs, utilities typically evaluate cost-effectiveness from most, if not all, of these perspectives.
Some utilities develop their own spreadsheets to carry out cost-benefit analysis. Others use existing software packages. In either case, several inputs specific to your utility’s circumstances are required, so you’ll need to do some background work before running cost-benefit tests.
A number of qualitative factors will also influence which energy efficiency activities your utility ultimately pursues. As a publicly-owned utility, the needs of your community will likely be weighted heavily – these can range from equity across customer classes and income levels to economic development opportunities. These are discussed in greater detail under the Developing a Portfolio of Programs subtopic.
Determining Which Screening Criteria to Use
Identifying the criteria and assumptions your utility will use to evaluate programs is often a public policy question. While utility staff can identify these issues, It may be also necessary to seek guidance from local leaders and members of the community.