2020 Vision of Cost-Effectiveness – California’s Current State
and Future Prospects: A CEDMC White Paper
December 31, 2019
The Council, in collaboration with E4TheFuture, has authored this white paper to provide a lay of the land by sharing the latest information on the current state of California’s CE framework going into 2020, and empower stakeholders with an outline of where progress can be made as the State looks to continue its DSM leadership.
Cost-effectiveness remains a critical facet of assessing energy efficiency, demand response, and distributed energy resource programs in California. Significant changes have taken place in recent years that are critical for program administrators, demand-side management and distributed energy resource service providers, and other stakeholders to understand. There are a number of improvements to cost-effectiveness that must be acted upon in the next year. These include:
- Short-term: Fixing problems with cost-effectiveness documentation and tools, removing free-rider incentives from the benefit-cost calculations, and addressing the framework for how potential and goals are developed.
- Long-term: Advocate for significant reforms to the overall DSM program portfolio approach, which in turn will bring along a number of needed reforms to how cost-effectiveness is addressed.
This paper is organized into three sections:
- Review of the current state of cost-effectiveness in California, including energy efficiency (EE) and demand response (DR) programs;
- Cost-effectiveness Issues related to distributed energy resources (DERs);
- Outline of next steps to improve cost-effectiveness going forward.
