Two new reports, one from the National Research Council (NRC) and one from the consulting firm McKinsey & Company, estimate a potential energy savings of 15 to 23 percent of by 2020. In identifying barriers to achieving these potential gains – upfront costs and lack of public awareness – both reports confirm the experience of cooperatives working to help consumer members lower their electricity use.

According to a report by the National Research Council, “accelerated deployment of [energy efficiency] technologies in the buildings, industrial, and transportation sectors could reduce energy use by 15 percent (15–17 quads) in 2020, relative to the Energy Information Administration’s ‘business as usual’ reference case projection, and by 30 percent (32–35 quads) in 2030. Even greater energy savings would be possible with more aggressive policies and incentives.”

The report by McKinsey pegs the total potential energy savings at 23 percent by 2020. The consulting group’s research indicates that “…the United States could reduce annual energy consumption by 23 percent from a business-as-usual projection by deploying an array of NPV-positive efficiency measures, saving 9.1 quadrillion BTU’s of end-use energy.…”

Both reports rely on data obtained from the Department of Energy’s Energy Information Administration (EIA).

According to the NRC report, “the greatest capability for energy efficiency savings is in the buildings sector, which accounts for about 70 percent of electricity consumption in the United States in 2007… For example, about an 80 percent increase in energy efficiency – translating to about a 12 percent decrease in overall electricity use in buildings – could be realized immediately by replacing incandescent lamps with compact fluorescent lamps or light emitting diodes.”

In its discussion of potential gains in residential sector, which constitutes 30 percent of total possible gains, the McKinsey report identified five clusters of efficiency opportunities: existing non-low-income homes (1,300 trillion end-use BTUs); existing low-income homes (610 trillion end-use BTUs); new homes (320 trillion end-use BTUs); electrical devices and small appliances (590 trillion end-use BTUs); and lighting and major appliances (340 trillion end-use BTUs).

With respect to the lighting and major appliance cluster, according to the authors, “[l]ighting constitutes 15 percent of energy consumption in this cluster but 82 percent of its savings potential, representing 9 percent (80 TWh) of total residential potential). Deployment of general use LED lighting, which becomes the lowest cost lighting technology between 2013 and 2017, presents much of this potential. Even today every home could save more than $180 per year by switching from incandescent to CFLs.”

Notably, the report’s baseline takes into account a market transition to CFLs currently underway. In tracking the stock and flow of CFLs, McKinsey researchers found that strong penetration of CFLs may slow the development and deployment of new LED technology.

This transition, however, is not automatic – it requires heavy lifting. Cooperatives have been aggressively promoting efficient lighting to their consumer members. A recent survey found that 79 percent of cooperatives have programs in place to encourage the use of CFLs.

In South Carolina, after a study revealed that residential lighting offered the greatest demand reduction potential, the state’s cooperative power supplier, Central Electric Cooperative, and the statewide association, launched a statewide campaign called “Do the Light Switch.” Since 2008, according to Lindsey Smith, director of public and member relations for the statewide association, South Carolina co-op consumer members have received nearly 2 million new CFLs.

The association mailed new, high-quality CFLs to every cooperative consumer-member.  To overcome one of the barriers highlighted by the McKinsey report – consumers’ misconceptions and lack of information – the statewide association crafted a multi-faceted communications campaign. With websites, mailings, free media and, importantly, person-to-person conversations at every cooperative annual meeting, the staff have been on-the-ground, educating consumers, one by one, on the new technology. In short: changing buying habits.

The statewide association will be analyzing the impact on overall electricity demand. In the meantime, consumer members have told the cooperative that they can already see the difference on their bills.