impact of incentives: driving demand for efficient products steven nadel aceee
TRANSCRIPT
Impact of Incentives: Driving Demand for Efficient Products
Steven Nadel
ACEEE
Incentives
• Commonly used by utilities and states to promote energy-efficient equipment
• Designed to save energy (electricity or natural gas) since energy savings less expensive than new energy supplies.
• Incentive covers part of the extra cost of an efficient product relative to a conventional product
• Some state incentives for wood stoves – see http://www.forgreenheat.org/incentives/state.html
• Very few utility incentives
Incentive Example
Source: Howard Geller, Proceedings of the 1986 ACEEE Summer Study on Energy Efficiency in Buildings
Federal Consumer Tax Incentives
• To consumers for purchase of efficient heating, cooling and water heating equipment, windows and insulation
• To builders for efficient new homes
• To manufacturers for efficient new appliances
HVAC Incentives
• $300 for efficient equipment, expires 12/31/11• 95% AFUE natural gas and oil furnaces and
boilers• SEER 16 central air conditioners• Wood stoves and boilers with a 75%
efficiency
• Only a small minority of central AC and oil/gas heating systems quality – minimizes “free riders”
• Most wood equipment qualifies
Market Transformation for RefrigeratorsInteraction of Standards, Energy Star & Tax Incentives
0.0
100.0
200.0
300.0
400.0
500.0
600.0
700.0
800.0
2000 2002 2004 2006 2008 2010 2012 2014
kWh/
year
Standard
EnergyStar
minimum tax credit
maximum tax credit
Market Transformation for Clothes WashersInteraction of Standards, Energy Star & Tax Incentives
0
0.5
1
1.5
2
2.5
3
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
Standard - Top Loading
Standard - Front Loading
EnergyStar
minimum tax credit
maximum tax credit
Impact of HVAC Incentives
Source: AHRI 2011
Energy Star Window Market Share
Energy Star Windows Region Metro Area 2010 %
Energy Star 2011 %
Energy Star
North (East) Milwaukee/Madison, WI 98% 99%
North (West) Portland, OR 89% 81% North-Central (East) Washington DC 95% 91% North-Central (West) San Francisco, CA 85% 76% South-Central (East) Atlanta, GA 96% 93% South-Central (West) Tulsa, OK 93% 91% South (East) Jacksonville, FL 87% 80% South (West) Houston, TX 99% 98% Average 93% 89%
Source: ACEEE/ASE of window retailers and installers, May 2011
Conclusions
• Incentive amounts, marketing and ease of use all important
• Federal tax incentives for highly efficient equipment have generally increased market share significantly and have had only modest levels of free riders
• For products in which majority of equipment on the market qualifies, free rider levels are high
• For wood stoves and boilers, if incentives are extended, qualification levels should be tightened substantially to reduce free riders