Efficiency stimulus will lower energy bills, says federal report

By Elisa Wood

April 30, 2009

Depending on your position, the federal stimulus money is either a jobs builder or a national budget buster. The Energy Information Administration offers another take. In a recent analysis, the EIA finds that stimulus money should reduce what consumers and businesses pay to heat, cool and light buildings.

The federal agency this month updated its annual energy outlook to compare how energy costs would fare with and without the American Recovery and Reinvestment Act. http://www.eia.doe.gov/oiaf/servicerpt/stimulus/index.html.

The stimulus package delivers about $12.5 billion for energy efficiency improvements in homes and buildings. Those upgrades should cut homeowner bills an average of $64 annually (in real 2007 dollars) over the next two decades. Homeowners will reduce use of heat 1.7%, and air conditioning 3.4% by 2030, the report says. Likewise, commercial buildings should see energy costs drop by an average of $5.7 billion, or 2.7% annually between 2010 and 2030. In all, the report pegs cost cuts for home and building owners in 2020 at $13 billion, or 2.6%, and in 2030 at $21 billion, or 3%.

In addition, expect to see a lot more solar panels and small wind turbines powering stores and offices very soon as a result of significant tax credits and loan guarantees. The stimulus funds should lead to 121 MW more of solar units on commercial buildings by 2011, a 15% jump, and 120 MW in distributed wind turbines by 2016, a 527% jump.

The EIA does not typically update its annual outlook after it is published. But the federal agency decided to do so this year because it was clear that the stimulus money, approved in February, would significantly alter its 2009 outlook, which was released at the end of last year. Indeed, the information may help inform national policy as Congress debates ways to avert higher energy costs under new programs being contemplated, such as carbon cap-and-trade and a renewable energy standard.

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