4–6¢/kWh for a residential customer and about half that for large commercial and industrial customers. Chapter 4 also shows that many energy efficiency projects with a rate of return of 10 percent or more could be undertaken by industry. Although most companies do not consider this rate of return attractive, it is nevertheless an attractive investment for society.

The greatest capability for energy efficiency savings is in the buildings sector, which accounted for about 70 percent of electricity consumption in the United States in 2007 (2700 TWh out of approximately 4000 TWh in total). Improvements in the energy efficiency of residential and commercial buildings—through the accelerated deployment of efficient technologies for space heating and cooling, water heating, lighting,4 computing, and other uses—could save about 840 TWh per year by 2020 (Figure 2.1), which exceeds the EIA’s projected increase in electricity demand of about 500 TWh for residential and commercial buildings by the year 2020 ( EIA, 2008) (see Table 2.1.1 in Box 2.1). Further continuous improvements in building efficiency could save about 1300 TWh of electricity per year by 2030 (Figure 2.1), which also exceeds the EIA-projected reference scenario increase in electricity demand of about 900 TWh per year . In addition, improvements in building efficiency could save 2.4 quads of natural gas annually by 2020 and 3 quads of natural gas annually by 2030 (Figure 2.2).

There are many examples of cost-effective efficiency investments that could be made in the buildings sector to save energy. For example, an approximate 80 percent increase in energy efficiency—translating to nearly a 12 percent decrease in overall electricity use in buildings—could be realized immediately by replacing incandescent lamps with compact fluorescent lamps or light-emitting diodes. Energy savings between 10 and 80 percent could be realized by replacing older models of such appliances as air conditioners, refrigerators, freezers, furnaces, and hot water heaters with the most efficient models. Such replacements would not occur as quickly as replacing lamps because it is usually cost-effective to replace appliances only when they near the end of their service lives. The same is true for motor vehicles. Buildings last decades, so the energy savings benefits of new buildings will take decades to realize. However, there are cost-effective retrofits that could be installed immediately .

4

On June 26, 2009, the Obama administration issued a final rule to increase the energy efficiency of general service fluorescent lamps and incandescent reflector lamps. The changes will take effect in 2012.



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