Energy Efficiency Mirage

It’s fair to say that it’s possible to improve energy efficiency, but it’s also fair to say that improved energy efficiency usually comes at a cost.

It’s the costs that organizations promoting energy efficiency like to ignore.

Automobiles have improved their energy efficiency, but at the cost of higher prices and smaller cars … and some will say, safety.

This article will deal with savings on the use of electricity, as this is a major component of the EPA’s proposed regulations for cutting CO2 emissions(1).

At the outset, it’s important to distinguish between improving efficiency, and not using electricity.

Organizations, such as the American Council for an Energy-Efficient Economy (ACEEE), promote setting thermostats higher, e.g., 78 degrees, in the summer, and lower, e.g., 68 degrees in the winter.

This does not improve efficiency, it reduces the use of electricity … and imposes a lower standard of living on people.

The ACEEE is one of the most egregious proponents of energy efficiency.

My article, Calling For Government Mandates, describes in detail why the ACEEE’s reports are so misguided, and misleading. The ACEEE, for example, ranked China’s residential segment as being among the most efficient in the world, with the United States ranked near the bottom. See Calling for Government Mandates

Having been to China, I know from first hand experience that China’s residential sector is not only less efficient, but also provides a much lower standard of living.

Clearly the ACEEE has a distorted view of America, yet the EPA adopted the ACEEE’s views to justify one aspect of its proposed regulations for cutting CO2 emissions.

Improving energy efficiency is a worthwhile goal, providing it’s done while keeping costs and living standards in mind.

LEDs for lighting use less electricity, while providing the same amount of light as the incandescent bulbs it replaces.

LEDs improve efficiency.

But even LEDs come at a cost. It costs around $12 for a 60-watt LED lamp as opposed to 60 cents for a comparable 60-watt incandescent bulb. The 100-watt LED lamp costs even more.

If a 100-watt LED cost $18 and a 100-watt incandescent cost 70 cents, and the LED replaces an incandescent bulb that burns 4 hours per day, it would only require about 14 months to recover the higher cost.

A 14-month payback is reasonable, but if the incandescent bulb only burns 15 minutes each day, such as in a closet, the payback would be 19 years, which is an unreasonable payback, and a bad use of financial resources.


Replica of 1879 Edison bulb used by GE at its 100th anniversary, alongside a modern LED lamp.
Replica of 1879 Edison bulb used by GE at its 100th anniversary, alongside a modern LED lamp.
Pat Hingle played Edison at commemorative dinners around the country.

Many other so-called proposals for improving energy efficiency also cost a great deal and are bad investments.

As mentioned in an earlier article, replacing all the windows in a moderately sized home will cost around $25,000 while only saving small amounts of electricity and heat.

Here’s what DOE’s Pacific Northwest National Laboratory (PNNL) says about triple pane windows it has used in its studies:

“It would take 23 to 55 years to save enough on a utility bill to cover the higher cost of the windows, based on national electricity costs.”

Obviously, replacing windows in an existing home with energy efficient windows is a bad idea, but is one of the alternatives for lowering CO2 emissions.

Improving energy efficiency can be worthwhile, but not if the costs are exorbitant.

Not only can the costs for improved efficiency be exorbitant, but the aim of demand response, as proposed by the EPA, is to force people to change their behavior.

Changing people’s behavior is when Big Government becomes intrusive.

Here is how one utility is approaching the issue of cutting CO2 emissions.

Their spokesman said, “Seattle City Light is committed to remaining a carbon neutral utility(2).”
“[ The plan is to] Capture savings through residential customer behavior change, and drive participation in our new whole home weatherization rebate program(3).”

It’s worth noting that the weatherization rebate program will result in higher electric rates, since the utility must recover the costs of subsidizing the program. The program cannot be justified on purely economic grounds since the return on investment is pitiful.

An advocate on Fox News said people can take cold showers to lower their electric bills.

Gina McCarthy, EPA Administrator, said that the proposed new regulations will save people money. If the program forces people to use less electricity with resulting lower living standards, she may be right.

But the chances are that higher electricity rates from the proposed regulations will result in higher electric bills, as well as lower living standards(4).

Forcing people to use less electricity does not result in improved energy efficiency, while forcing people to spend money to achieve improvements in efficiency without a fair return on their investment, deprives people of having an opportunity to invest where they want, e.g., on education, or medical bills, or food.

That’s something to think about on this Independence Day.

And, that’s not good for America.



  1. Building Block # 4: “Reducing emissions from affected EGUs in the amount that results from the use of demand-side energy efficiency that reduces the amount of generation required”.
  2. From IntelligentUtility, Utility2Utility series.
  3. Ibid
  4. Replacing low cost electricity with high cost electricity from wind and solar will increase electric bills for consumers and industry.

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