COVID-19 slows US energy efficiency sector despite increase in policy adoption

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Despite an increase in the number of US states adopting energy efficiency codes/laws or setting ambitious energy-saving targets, COVID-19 has slowed overall market growth in 2020, according to a new study released by the American Council for an Energy Efficiency Economy (ACEEE).

ACEEE’s 2020 State Energy Efficiency Scorecard has found that many US states which had set ambitious climate goals since 2018, had to abruptly shift their focus this year to mitigate the health and economic impacts of the deadly global pandemic.

Despite an increase in the number of jobs created within the sector over the past years, 2020 saw energy efficiency workers losing jobs—with an estimated more than 300,000 still unemployed.

ACEEE has called for regulators to intervene to increase the number of jobs within the sector.

Although the pandemic continues to negatively affect the sector, some states have implemented laws to improve their resiliency against the effects of the virus.

For instance, California utility regulators in January approved $45 million in incentives for high-efficiency heat pump water heaters, a crucial technology for reducing greenhouse gas emissions.

In September, California Governor Gavin Newsom issued an executive order calling for the phase-out of new gasoline-powered vehicles by 2035.

Governor Gavin Newsom said: “Energy efficiency has been a foundational part of California’s environmental efforts for the last four decades. Choosing to embrace a smarter way of using energy will save people and businesses money, and by leaning into energy efficient policies we will drive new technologies, creating the economy of the future.

“That’s why I’m proud that California is receiving this top honor from ACEEE, recognising not only the state’s national leadership but also the ongoing role energy efficiency continues to play as a key pillar in our economic health and our fight against the climate crisis. Good climate sense is good economic sense.” 

California which ranked number 1 scored 32 metrics out of 50 in five areas including policies and programmes adopted.

States were scored based on government initiatives, appliance and equipment standards, building codes, vehicle efficiency and energy-saving targets.

Massachusetts ranked #2, Vermont (#3), Rhode Island (#4), New York (#5), Maryland (#6), Connecticut (#7), Washington, DC (#8), and Minnesota and Oregon (tied for #9).

The bottom five states, each earning 7 or fewer points include Kansas (#47), Mississippi (#48), North Dakota (#48), West Virginia (#48) and Wyoming (#51).

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Other key study findings include:

  • Twelve states have adopted California’s Low-Emission Vehicle (LEV) standards and Zero-Emission Vehicle (ZEV) programme.

Many of these states, including California, Maryland, Massachusetts, Oregon, Vermont, and Washington, have also set goals to reduce vehicle miles traveled or transportation-related greenhouse gas emissions.

  • Close to a dozen states made significant progress strengthening efficiency standards for new construction.
  • A number of states have made efforts to foster equity in efficiency policies and programmes.

For example, multiple states, including California, New Jersey, and Oregon, have taken steps to expand programmes to better meet the needs of customers with lower incomes.

Steven Nadel, ACEEE executive director, said: “A number of states see that they have to act aggressively now to cut carbon emissions, but others just aren’t acting urgently. We need to see more states follow the leaders here, and quickly. Aggressive state policies combatting climate change are absolutely necessary no matter what gets done in Washington.

“In this pandemic and recession, policymakers can embrace efficiency efforts to help residents reduce their utility bills and to get more people back to work, all while cutting pollution.”

Learn more about the scorecard here.