Why You Should Care About Energy Efficiency — Even After Going Solar

As a residential and commercial solar salesperson for many years, I would often tell prospective customers that it was silly for them to pay for solar panels to generate electricity that they shouldn’t have been using in the first place. It was an acknowledgment that, in a perfect world, they would make their homes more efficient and reduce their base electricity usage before ‘going solar.’

At the time, the discussion about energy efficiency was a way to help customers decide what size systems they really needed. If budgets were tight, smaller, less-expensive systems might suffice and still offset 100% of electricity usage after some simple and relatively inexpensive upgrades. Most still went with the larger systems, possibly thinking that it would be too hard, expensive or unimportant to make the effort.

Now, I see that as an opportunity — both for individual solar-property owners and for our larger efforts to reduce emissions and accelerate the clean energy transition. The ~4 million solar homeowners around the United States are the perfect constituency to change minds and increase demand for energy efficiency and electrification products and services in their communities.^{1, 2}

Millions of solar buildings today are inefficient and many additionally still use fossil fuels for space and water heating and cooking. Making those buildings more efficient will free up already installed solar electricity to be used on loads previously run by fossil fuels. Additional electrification efficiencies will free up more solar energy to power EVs and reduce transportation emissions.

According to the U.S. Department of Energy (DOE), “Nearly one-third of U.S. greenhouse gas emissions are attributable to America’s 130 million homes and commercial buildings, which use 40% of the nation’s energy and 75% of its electricity for power, heating and cooling. But today, buildings waste up to 30% of that energy.”³

And yet many U.S. property owners don’t consider energy efficiency investments (many of which can be much cheaper than going solar) worthwhile, either before or in conjunction with installing solar. After all, once the solar panels are installed, they generate electricity from sunlight — free electricity once the system has paid for itself in savings. So why worry about energy efficiency? How much energy or money can really be saved anyway?

The savings potential is huge. “Making energy efficiency upgrades… can save 5-30% on your monthly energy bill,” the DOE said.⁴ That can definitely add up.

Solar owners have a clean energy source already paid for and producing clean energy. Making those properties more efficient immediately increases the percentage of loads being offset by the solar energy. Plus, making a building more energy-efficient after solar panels are installed allows property owners to recoup their money faster and save more money over the lives of their solar-energy systems.

Additionally, if gas is still used for cooking or space or water heating, solar panels will not reduce that portion of the energy bill. But weatherizing the building will reduce leaks, increase comfort, reduce gas usage and carbon footprint, and further reduce energy expenses. For businesses, lowering these heating bills means lower operating costs and more money left for other business expenses.⁵

Electrification also leads to higher efficiency. The International Renewable Energy Agency said that “heat pumps achieve efficiency four to five times higher than condensing gas boilers” and “electric vehicles (EVs) are two to three times as efficient as conventional gasoline and diesel cars.”^6> This is a key driver behind the Electrify Everything movement, which promotes the electrification of space heating, cooking and other appliances as well as transportation.

Replacing existing fossil fuel-based water heating or space heating appliances at the ends of their lives with new high-efficiency heat pumps further reduces energy usage. The success and recent expansion of Maine’s heat pump-rebate program highlights not only that heat pumps work in all climates, but that transitioning from gas or oil heat to electric is easy and cost-effective when consumers and the workforce are knowledgeable about the benefits.⁷

In the case of solar homes, the new systems can then be operated using excess solar energy. Excess solar generation can also charge EVs, avoiding gasoline usage and costs and reducing vehicle maintenance costs and emissions as well.

If there is still excess solar-generated electricity after all of that, in many states it is also lucrative to export excess power back to the grid.

On a broader, global scale, energy efficiency is a key strategic component of any roadmap to keeping global temperature rise below 1.5°C and avoiding climate catastrophe around the globe. According to the International Energy Agency (IEA), “Energy efficiency is called the ‘first fuel’ in clean energy transitions, as it provides some of the quickest and most cost-effective CO₂-mitigation options while lowering energy bills and strengthening energy security.”⁸

Wide-scale energy efficiency efforts across all economic sectors reduce fossil fuel demand across the globe. These efforts can allow us to reach peak fossil fuel usage earlier, stop building new fossil fuel infrastructure and meet all new energy needs from new clean energy development. This is key to staying on track with net zero goals.⁹

Widespread adoption of energy efficiency also reduces congestion on the grid, improving grid reliability and security, and reduces demand, decreasing energy prices.¹⁰

In September, the IEA released an update of its 2021 report “Net Zero by 2050: A Roadmap for the Global Energy Sector.” Two years later, this update optimistically reports that solar PV installation and electric vehicle adoption are keeping pace with their initial estimates of required implementation to stay below or near the 1.5°C goal.¹¹

It is also heartening that the IEA estimates 80% of emissions reductions required by 2030 can be met solely with clean energy, energy efficiency, electrification and methane reductions. These are all things we know how to do today with technologies that are being deployed on a wide scale already.

However, the IEA also reports that a doubling of the rate of energy efficiency improvement implementation (and a tripling of clean energy adoption overall) by 2030 are required to keep that goal reachable.¹² Energy efficiency paired with solar (and other clean energy sources) truly is key to reducing carbon emissions.

To help meet those goals, the historic federal Inflation Reduction Act has created rebates and grants to make energy efficiency upgrades more affordable. The Biden Administration’s newly announced Affordable Home Energy Shot is designed to reduce the costs of upgrading buildings further.¹³ Some states also have additional energy efficiency-rebate programs in place.

These incentives increase the lifetime savings of those upgrades for property owners but also make financial sense on a wider economic scale too. It’s been proven that they more than pay for themselves and are good for the economy at large.

In a 2020 study by the public utility commission in my home state of Pennsylvania, it was calculated that “on average at full scale, for every dollar invested in efficiency, Pennsylvania would accrue $1.22 in economic benefits.” It was also found that “across all scenarios and all EDCs [Electric Distribution Companies]… EE [energy efficiency] is a substantial and cost-effective resource.”¹⁴

At the national level, in 2021 the DOE found that the United States has the potential to cost-effectively reduce its electricity use by the equivalent of 16% of estimated baseline usage in 2035. The cost of saving that electricity was found to be much lower than the cost of generating it in all 50 states, with 12%–21% savings per state.^{15, 16}

The average cost of saving electricity was found to be 2.6 ¢/kWh, making it a valuable low-cost energy source in its own right — 30% cheaper than electricity generated from gas and 75% cheaper than electricity generated from coal. For the economy, widespread energy efficiency adoption means enormous savings across all sectors.¹⁷

It would also lead to huge reductions in peak demand, which is key to facilitating a transition to clean energy by reducing usage of expensive, fossil fuel-intensive peaker plants and reducing energy-storage requirements.

Almost 20 years ago, the visionary founder of RMI, Amory Lovins, realized that energy efficiency could change the accepted calculus that the transition away from fossil fuels would be hugely expensive for society. Instead, he argued, energy efficiency upgrades across all sectors of the economy would lead to reduced costs and increased profits for all, with the added bonus of reducing carbon emissions and facilitating the transition to clean energy.

Lovins said, “Using energy more efficiently offers an economic bonanza — not because of the benefits of stopping global warming but because saving fossil fuel is a lot cheaper than buying it.” This has only become more true in the ensuing decades due to higher fossil fuel prices and huge leaps in technological efficiencies with precipitously dropping costs.¹⁸

While large-scale governmental policy adoption and corporate action are key to increased energy efficiency adoption, individuals and local home and business owners must play a part in changing consumer behaviors and shifting market demand. Solar-property owners are natural recruits for this effort. With solar-energy systems already installed, we can play a part in the larger efforts to drive energy efficiency forward.

We must demand better insulated, more efficiently designed homes and buildings. We must demand more efficient appliances. We must electrify everything, converting our homes’ systems. We must demand HVAC contractors, plumbers and other building contractors offer these products and conversion services. We must purchase electric vehicles. And we must talk about why these actions are important and how they’re saving us money and making an outsized and much-needed contribution to fighting climate change.

Note: Since this article was written, at COP28 130 countries agreed to triple their renewable energy capacity and double their energy efficiency improvement implementation by 2030. This commitment is in line with the IEA projected requirements mentioned in the article that are necessary to continue on a path toward reduced emissions and minimize future global temperature increases.

Sources

1. https://tinyurl.com/5h36j85x
2. https://theroundup.org/solar-power-statistics/
3. https://tinyurl.com/435jejfm
4. https://tinyurl.com/43dvjb24
5. https://tinyurl.com/yj6jryej
6. https://tinyurl.com/yub4fsap
7. https://tinyurl.com/3w8xac4x
8. https://tinyurl.com/3cdtpuwm
9. https://tinyurl.com/2p887bxt
10. https://tinyurl.com/2p9dfkk3
11. https://tinyurl.com/2p887bxt
12. Ibid.
13. https://tinyurl.com/49fcna36
14. https://tinyurl.com/4nhhpfc4
15. https://tinyurl.com/2y6bc27v
16. https://tinyurl.com/m8earjda
17. Ibid.
18. https://tinyurl.com/4u9m46u2

This article was originally published in Solar Today magazine and is republished with permission.