Energy efficiency and solar advocates have on occasion butted heads over which option should be implemented in homes and buildings first and how much should be installed before the other is considered. Here at ACEEE we believe that, like market solutions vs. energy efficiency programs,this is a false choice. Both are valuable and can, and should, work together as an integrated solution to create cleaner and cheaper energy. While energy efficiency is just as clean as solar when it comes to emissions, efficiency by itself can’t produce energy for customers looking for a clean energy option, and solar without energy efficiency can’t reach the full extent of its potential.
However, in recent years, some solar companies and some consumers have been employing a solar-first strategy in the residential sector—installing solar systems without paying much attention to energy efficiency. This strategy has been spurred in part by substantial solar tax credits, net-metering rules in place in most states, and the availability of solar financing that reduces or even eliminates the initial purchase price, replacing the up-front cost with monthly payments that extend over many years.
Despite these incentives, it still generally makes sense to implement as much efficiency as possible when installing generation. To look more closely at this issue, we conducted two illustrative analyses. The first compares the cost per kWh produced or saved from solar and energy efficiency when done individually or together. The second compares solar technical potential and residential electricity use, with and without efficiency. We find that when efficiency and solar are implemented in tandem, costs are lower, and solar can meet a larger share of residential loads.
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