IDEAS home Printed from https://ideas.repec.org/a/tpr/restat/v105y2023i4p798-817.html
   My bibliography  Save this article

Decomposing the Wedge between Projected and Realized Returns in Energy Efficiency Programs

Author

Listed:
  • Peter Christensen
  • Paul Francisco

    (University of Illinois at Urbana-Champaign)

  • Erica Myers

    (University of Calgary)

  • Mateus Souza

    (Universidad Carlos III de Madrid)

Abstract

Evaluations of energy efficiency programs reveal that realized savings consistently fall short of projections. We decompose this “performance wedge†using data from the Illinois Home Weatherization Assistance Program (IHWAP) and a machine learning-based event study research design. We find that bias in engineering models can account for up to 41% of the wedge, primarily from overestimated savings in wall insulation. Heterogeneity in workmanship can also account for a large fraction (43%) of the wedge, while the rebound effect can explain only 6%. We find substantial heterogeneity in energy-related benefits from IHWAP projects, suggesting opportunities for better targeting of investments.

Suggested Citation

  • Peter Christensen & Paul Francisco & Erica Myers & Mateus Souza, 2023. "Decomposing the Wedge between Projected and Realized Returns in Energy Efficiency Programs," The Review of Economics and Statistics, MIT Press, vol. 105(4), pages 798-817, July.
    • Handle: RePEc:tpr:restat:v:105:y:2023:i:4:p:798-817
    DOI: 10.1162/rest_a_01087
    as

    Download full text from publisher

    File URL: https://doi.org/10.1162/rest_a_01087
    Download Restriction: Access to PDF is restricted to subscribers.
    File URL: https://libkey.io/10.1162/rest_a_01087?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Tobias Wekhof & Sébastien Houde, 2023. "Using narratives to infer preferences in understanding the energy efficiency gap," Nature Energy, Nature, vol. 8(9), pages 965-977, September.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tpr:restat:v:105:y:2023:i:4:p:798-817. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Kelly McDougall (email available below). General contact details of provider: https://direct.mit.edu/journals .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.