Will energy efficiency be bigger than rooftop solar in the Southeast?

You don't have to move to the Shire to live in an efficient home.

It’s easy to spot a solar home, but efficient homes are well camouflaged. So its no surprise that media and public opinion are focused on solar, particularly rooftop solar.

But for our electric companies – and the many people who pay attention to them – a good question to ask is what will be the biggest technologies driving electric demand? Will rooftop solar reshape electric demand? What about electric vehicles?

It won’t be a shocker to learn that the American Council for an Energy-Efficient Economy (ACEEE) found that the biggest potential driver in changing the electricity market is energy efficiency.

The new ACEEE report, Electricity Consumption and Peak Demand Scenarios for the Southeastern United Statesreports that even with substantial economic and population growth, new technology could result in electric power remaining roughly flat for the next few decades. It’s no secret that the Southeast hasn’t fully embraced energy efficiency. In fact, the lack of historical effort in eliminating energy waste is one of the reasons that energy efficiency is the technology with the most potential impact.

What was a surprise – at least for me – is that the potential for electric vehicles to reshape the electricity market is minimal, at best. That’s reassuring news! Because EVs are so efficient, we can get to the future without having to build a new electric power supply! Even with electric vehicles representing 1/3 of passenger vehicles, energy efficiency could more than compensate for the new demand represented by high tech EVs.

One of the other interesting aspects to the report is how these technologies might affect the seasons in which power is most in demand. As ACEEE’s Executive Director Steve Nadel noted, “electricity markets in the Southeast are facing many changes on the customer side of the meter.” The technologies that ACEEE studied in the report include energy efficiency, rooftop solar, electric vehicles (EVs), electric heat pumps, and demand-response programs that actively shift load away from peak demand events. And while electric demand in the Southeast usually peaks in the summer (as documented in Seasonal Electric Demand in the Southeast United States), recent polar vortex events are driving increasing attention to episodes of high electric demand in the winter.

Changes in Electric Sales by 2040 in an Accelerated Scenario, courtesy of ACEEE

The potential for stable electric demand in the Southeast represented in ACEEE’s “accelerated” scenario reflects a balance of forces. Energy efficiency and rooftop solar installations could more than eliminate load growth, but could be balanced by shifting cars from gasoline to electricity, and HVAC systems from fuel oil and window units to more efficient heat pumps. As shown at right, the largest factor in the expected changes to electricity sales in the Southeast through 2040 is energy efficiency.

It’s uncertain, of course, what will actually happen to electricity demand in the Southeast over the next several decades. To manage that uncertainty, we continue to encourage utilities to consider new technologies and opportunities when planning for the future. Time and time again, utilities have overbuilt as a result of inflated demand expectations.

SACE continues to engage with utilities across the Southeast through their integrated resource plan (IRP) processes and other avenues. We are pushing for cleaner energy, for sure, but always in a manner that helps electricity customers get the best bang for the buck with low-cost energy efficiency and renewable energy.

With federal support for clean energy and energy efficiency currently eroding, it is more critical than ever that SACE continues our work at the state and local levels to make sure that utilities make prudent decisions for their customers’s wallets, while also minimizing their environmental impacts. With tools like this new report from ACEEE, and the support of our members, we feel confident that we will be able to continue making progress in our region toward a cleaner, healthier and more efficient energy economy.

SACE Energy Policy Manager Taylor Allred contributed to this blog.

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