Counterfactual analysis of energy efficiency policies in the U.S. across three decades: A time series cross section approach

Marvin J. Horowitz, Ph.D., President, Demand Research, USA

Keywords

counterfactual analysis, energy efficiency policy, impact evaluation, net impacts, retail electricity sales, consumption or use, electricity intensity, policy commitment

Abstract

This paper describes a statistical methodology that measures the net annual impacts of energy efficiency policies at the aggregate level. This methodology joins together the econometric techniques of time series cross section modelling and counterfactual analysis, creating a program or policy evaluation approach that is parsimonious, transparent, robust and generalizable. Among its many advantages, it can be adapted to any pre-defined multi-regional area, such as the United States or the European Union, or sub-regions, using readily available published data from government or public agencies. The findings presented in this paper indicate that in the United States, strong policy commitment at the state level resulted in substantially positive energy efficiency policy impacts in the commercial and industrial sectors. The findings for the residential sector are mixed, possibly due to complications that arise from spillover and earlier policy adoption in this sector of the economy.