Do Energy Efficiency Investments Deliver? Evidence from the Weatherization Assistance Program*

Abstract

for excellent research assistance. We are indebted to Jesse Worker for outstanding management of a challenging project. Finally, we thank our contacts at both our partner utility and the community action agencies, without whom this project would not have been possible. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. At least one co-author has disclosed a financial relationship of potential relevance for this research. Further information is available online at http://www.nber.org/papers/w21331.ack NBER working papers are circulated for discussion and comment purposes. They have not been peerreviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

Moral Hazard and the Energy Efficiency Gap: Theory and Evidence

“…We first find that realized energy savings after retrofit are below predicted savings for several retrofit measures, a puzzle that is increasingly documented but still highly debated (Metcalf and Hassett 1999;Fowlie, Greenstone, and Wolfram 2015). The discrepancy is specifically large for those measures, the quality of which is deemed hard to observe ex post.…”

“…The estimation follows the quasi-experimental approach of Fowlie, Greenstone, and Wolfram (2015), Zivin andNovan (2016), andMaher (2016), only extended with interactions with dayof-the-week dummies, DW , and dummies that identify hard-to-observe and easy-to-observe measures, noted HT O and ET O, respectively. We consider the following regression model:…”

“…Several ex post evaluations of energy efficiency programs also find that realized energy savings underperform those predicted by engineering models (Metcalf and Hassett 1999;Fowlie, Greenstone, and Wolfram 2015;Zivin and Novan 2016;Maher 2016;Davis, Fuchs, and Gertler 2014;Houde and Aldy 2014). This measurement gap between predicted and realized savings can arise from a variety reasons and is subject to an intense debate.…”

Assessing the Energy-Efficiency Gap

“…Replacement of air conditioners led to increased electricity consumption, in stark contrast to engineering predictions of energy savings (Davis, Fuchs, and Gertler 2014). A randomized evaluation of the Weatherization Assistance Program in the United States found model projections exceeded realized savings by a factor of 2.5 (Fowlie, Greenstone, and Wolfram 2015b). Nonetheless, care must be taken in generalizing these findings, as weatherization may not be representative of other energy-efficiency programs, which have been found to vary significantly in cost effectiveness (Hoffman et al 2015).…”

Panel Data and Experimental Design

“…These include Bloom et al (2013), Blattman, Fiala, and Martinez (2014), Jessoe and Rapson (2014), Bloom et al (2015), Fowlie, Greenstone, and Wolfram (2015), and Fowlie et al (2016).…”