The industrial sector is responsible for about a third of the energy usage in the United States, and there is significant energy saving potential from the industrial sector. However, the phenomenon of "energy efficiency gap" -the scenario in which cost-effective energy efficient technologies enjoy only limited market success -appears frequently in the industrial sector. This article tries to explain this efficiency gap in the industrial sector by empirically estimating the implied discount rates and payback thresholds industrial firms use to evaluate their energy efficiency investments. Using the Industrial Assessment Centers (IAC) database from 2002 to 2011, with more than 30 000 energy efficiency recommendations, this article builds structural models of firms' evaluation of an energy efficiency project. The model results show that the implied discount rates of medium to small industrial firms range from 40 to 45%, and the average payback threshold is about 9 months.

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This paper provides the first empirical evidence on the correlation between Time-Of-Use (TOU) electricity pricing and the adoption of energy efficient appliances and solar panels. We use household-level data in Phoenix, Arizona from an appliance saturation survey of about 16,000 customers conducted by a major electric utility. Our empirical results show that TOU consumers are associated with 27% higher likelihood to install solar panels but not more likely to adopt energy-efficient air conditioning based on the propensity score matching and coarsened exact matching methods. The findings highlight that policy makers could combine TOU and solar panels when implementing educational programs or when giving out financial incentives to consumers. Our results imply that TOU is associated with a similar impact of the incentive offered by $2,070∼$10,472 tax credits or rebates on solar adoption.

Improvements in overall sustainability include reductions in energy consumption. There remain significant yet largely unexploited opportunities to reduce energy consumption of commercial buildings. The investments required for green certification can help systematically improve the sustainability of the design of buildings. If the percentage of buildings with green certificates increases, sustainability of the overall building sector can be improved. In order to facilitate the diffusion of green commercial buildings, it is important to understand the patterns of the diffusion and the key factors influencing buildings' decisions. Applying a spatial fraction logit model and an instrumental variable approach to data on commercial buildings for New York, Arizona, Colorado, and Florida, this paper demonstrates that there is strong spatial correlation in the diffusion of green building certificates. It also finds that the split-incentive problem between building owners and renters plays a role in the diffusion. The findings have important implications for policy makers. By analyzing the interactions of the green buildings and the characteristics of the green building clusters, the results are useful in the identification of buildings that are more likely to adopt green certificates.