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

A-Tier
Journal: Review of Economics and Statistics
Year: 2023
Volume: 105
Issue: 4
Pages: 798-817

Authors (4)

Peter Christensen (not in RePEc) Paul Francisco (not in RePEc) Erica Myers (University of Calgary) Mateus Souza (Universität Mannheim)

Score contribution per author:

1.005 = (α=2.01 / 4 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

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.

Technical Details

RePEc Handle
repec:tpr:restat:v:105:y:2023:i:4:p:798-817
Journal Field
General
Author Count
4
Added to Database
2026-01-25