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October 28, 2015
Minnesota’s Conservation
Improvement Program generates at least $4 in benefits for every $1 invested
For Immediate Release:
SAINT PAUL – Minnesota’s Conservation
Improvement Program (CIP), a nationally-recognized energy
efficiency program, generates at least four dollars in benefits for every
dollar invested, according to an independent analysis released today by the
Minnesota Commerce Department.
With regulatory oversight and technical assistance from
the Commerce Department, CIP is a statewide program funded and administered by
more than 180 utilities to help Minnesota households and businesses reduce
their consumption of electricity and natural gas.
“This comprehensive study makes it clear that energy
efficiency is a smart, positive investment for our state,” said Commerce
Commissioner Mike Rothman. “The
Conservation Improvement Program not only saves energy and reduces utility
bills for Minnesota consumers and businesses.
It also creates jobs, boosts our economy and protects our environment.”
Conducted by an energy and environmental consulting firm,
Cadmus, the study assesses the statewide economic impact of CIP activities
completed from 2008 through 2013, including the energy savings that will result
through 2032.
The study includes two types of analysis. A cost-effectiveness assessment found a total
net benefit of approximately $3.3 billion from lower utility costs and avoided
environmental damage. An economic impact
assessment found a total net benefit of more than $5.9 billion in new economic
output and nearly 55,000 job years. (A “job year” equals one job for one year.)
Combining both assessments, the report shows that
every dollar invested in CIP provides $4.00 to $4.30 in energy savings,
environmental benefits and new economic activity.
“The Conservation Improvement Program plays a
vital role in helping Minnesota achieve our goals to address climate change and
reduce our dependence on power that comes from burning fossil fuels,” said
Rothman. “The cheapest and cleanest form of energy is the energy
that we never use in the first place.”
Since
the early 1980s, Minnesota has been a national leader in promoting energy
efficiency. In 2007, the state also
adopted the Next Generation Energy Act, landmark bipartisan legislation that
requires electric and natural gas utilities to achieve energy savings of 1.5
percent of average annual retail sales each year. It is one of the most aggressive energy
efficiency standards in the nation.
Through CIP, utilities offer services to their
residential customers such as energy audits and incentives for energy-related
improvements. These include rebates for high-efficiency lighting and
appliances such as furnaces, air conditioners and water heaters, as well as
insulation and air sealing.
For business customers, utilities offer rebates for
high-efficiency boilers, chillers and rooftop units; lighting and lighting control systems; and motors. They
also provide design assistance for energy-efficient buildings and technical
assistance to reduce the energy intensity of manufacturing processes.
Investments
in energy efficiency have positive effects on the economy in two ways. First, spending
on energy efficiency projects supports jobs and business for contractors and
suppliers directly involved in the projects. Second, the money that consumers save
from lower utility bills can be spent on other goods and services.
In
turn, both the initial investment and the re-spending of energy savings produce
direct, indirect and induced economic effects (known as “multiplier effects”).
For
example, a direct effect is the money that goes to workers employed on an
energy efficiency project or to a store where consumers spend the money they saved
on their utility bills. An indirect
effect includes the money that then flows through the supply chain and
supporting businesses (for example, a supplier to the contractor or store). Finally, an induced effect occurs when the money from the direct and indirect
effects gets re-spent in the economy.
The study, “The Aggregate Economic Impact of the
Conservation Improvement Program 2008-2013,” is available on the Commerce Department website. A webinar will
be held on Friday, Oct. 30, from 11 a.m. to noon to review key findings of the
report.
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Media Contact:
Ross Corson
Director of Communications
Minnesota Department of Commerce
P: 651-539-1463 | C: 651-368-5050 | ross.corson@state.mn.us
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