Market Drivers

Energy efficiency regulation and legislation is being driven by several market trends that will most likely accelerate in the coming years. Underlying all of these market drivers are concerns voiced by policymakers, industry experts and consumers alike around increasingly scarce energy resources, climate change scenarios and a dilapidated energy infrastructure in need of investment.

Mirroring many state priorities, the upcoming federal stimulus bill is expected to include large incentives for states and utilities to invest in advanced metering technologies, making this the next new national infrastructure project. These technology investments, which include both physical “Smart” meters installed in homes and businesses as well as the network infrastructure to manage meter data, help utilities and grid operators better manage energy supply and demand, allow the introduction of time of use pricing that lowers consumer prices, reduces the threat of power disruption and enables new renewable energy resources to enter the grid. Industry experts expect that the smart meter market will grow rapidly in the next years, from less than 6% of customers today to about 90% by 2012.

Utilities are also finding it increasingly difficult to site new power plants in the face of local opposition as well as pressure from advocacy organizations concerned about the greenhouse gas implications of new fossil-fuel based energy supplies. In 2008, 24 coal-fired power plants were cancelled due to these concerns. Given these realities, utilities and grid operators are relying more and more on demand resources to meet energy needs. A recent study estimates that over 22% of future energy demand can be met through energy efficiency, with many experts putting the figure even higher.

In addition, more general customer concerns around rising energy costs and climate change impacts are forcing utilities and state governments to devote more resources to help residential customers reduce their household energy use. Most Americans are personally concerned about their energy use, and are looking to utilities and government for help.

Efficiency 2.0 is creating the advanced software needed to engage and empower these customers to better manage their energy and carbon impacts, including online tools that translate time of use data into actionable recommendations.