Strategic Energy Management Program Persistence and Cost Effectiveness

The North American Strategic Energy Management Collaborative (NASEMC) is working to accelerate the adoption and enhance the effectiveness of Strategic Energy Management (SEM) offerings, with the goal of producing economy-wide energy and cost savings as well as emission reductions. On behalf of the NASEMC, the Lawrence Berkeley National Laboratory and ACEEE jointly analyzed the cost effectiveness and prospective savings persistence of SEM programs across North America, surveying 24 active programs. All programs reported that SEM was cost effective. The total resource cost (TRC) test is by far the most common approach to analyzing program cost effectiveness; however, values are generally noncomparable due to varying inputs and assumptions. This report finds that effective useful life (EUL) values vary widely; most are not based on primary research, and some include capital measures.  Further, SEM programs vary widely in their implementation approaches, and the report’s findings provide a rich resource for future program design. Finally, the report underscores that SEM’s foundational concept of continual improvement challenges traditional cost-effectiveness metrics.