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Planet-Profit Report, reporting on sustainable development in the Western United States.

Residential retrofit programs growing in the Southwest

Utilities in six Western states spend millions

By J.C. Martel, Southwest Energy Efficiency Program

By all accounts, there is significant potential for cost-effective energy savings in existing homes. A study published by the U.S. National Academy of Sciences demonstrates that home retrofits can provide a 25-30 percent reduction in energy use at an average cost of 2.7 cents per kWh.1 Given this very cost-effective energy savings potential, most utility demand-side management (DSM) portfolios include a variety of programs to promote home retrofits.

The purpose of this report is to review the experience of electric and gas utilities in the Southwest in promoting energy efficiency improvements in existing homes, in particular in the states of Arizona, Colorado, New Mexico, Nevada, Utah and Wyoming. These six states contained about 8.1 million housing units as of 2009. The report also highlights best practices and makes recommendations for improving energy efficiency retrofit programs in the Southwest.

This report examines the efforts of 12 gas and electric utilities in the Southwest. The combined Demand-Side Management (DSM) budget of these utilities is over $400 million per year as of 2011. Nearly $100 million of this amount is specifically allocated to support residential retrofit programs, excluding programs dedicated to serving low-income households.

Some utilities have significantly increased retrofit program funding over the past few years. From 2009 to 2011, the New Mexico Gas Company’s retrofit program budget grew 568 percent; for Southwestern Public Service Company the growth was 211 percent; for Tucson Electric Power it was 210 percent; and for Arizona Public Service Company it was 186 percent. The funding commitment to support residential retrofit in the Southwest is impressive and steadily growing.

For the purposes of this report, programs are classified into three types: Whole Home, Bundled Efficiency, and Single Measure. The primary difference between Whole Home and Bundled Efficiency is that a Whole Home program requires a home energy assessment and energy upgrades are based on the assessment, whereas a Bundled Efficiency program simply packages measures together unbound by an assessment. Single Measure programs provide rebates for one piece of equipment or building upgrade independent of other building systems. Table ES-2 shows the measures offered by utilities in any one of the three program models.

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