Energy conservation critics rely on niche study

Wednesday, April 6, 2016

A new report questioning the cost-effectiveness of Ontario’s energy conservation programs extrapolates from a 2015 U.S. study to make its case, even though one of the co-authors of that study has warned readers not to draw wider inferences from her work.

“This is one study in one state looking at one sub-population and one type of measure. I would not feel comfortable generalizing from our study in Michigan,” Professor Meredith Fowlie of the University of California, Berkeley, told the Washington Post last year.

The authors of a new report from the Fraser Institute apparently felt no such discomfort in suggesting that the Berkeley study’s findings from a program aimed at upgrading energy efficiency in low-income households in portions of the state of Michigan could apply to Ontario’s extensive suite of energy conservation programs.

“While independent Ontario program data is scarce, studies from the United States suggest that conservation program costs are often understated and far outweigh the benefits. For example, a 2015 Berkeley University Study found that the U.S. Weatherization Assistance Program — a home retrofit program — predicted 2.5 times more energy savings than were actually realized. Moreover, the cost of the program per household was about twice the value of the energy savings,” states the media release introducing the report, Demand-side management: How “conservation” became waste.

In taking a different perspective on the Berkeley study, Martin Kushler, a senior fellow with the American Council for a Energy-Efficient Economy notes that the Weatherization Assistance Program (WAP) is targeted to housing stock that is in very poor condition resulting in additional health and safety benefits that also have value, albeit not measured in the Berkeley study. “WAP typically installs smoke detectors, carbon monoxide detectors, fixes wiring problems, fixes gas leaks, etc.,” he observes.

The Fraser Institute’s Ontario-based energy conservation critics call government-sponsored demand-side management (DSM) programs a paternalistic disavowal that consumers make conscious decisions about what they value and are willing to pay for. Energy is characterized as one input — along with capital, labour and materials — which should carry equal weight in a balance of interests.

Yet, while clearly arguing with an agenda: “We consider it highly likely that the current DSM programs are a net loss to the province and should be discontinued,” they also raise points that conservation advocates would endorse.

“There is a serious need for comprehensive, valid and objective information on the costs and benefits of such programs in Ontario,” the report maintains.

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