Economic and environmental impacts of local utility-delivered industrial energy-efficiency rebate programs

Manufacturing operations are constantly encouraged to include energy-efficient practices into their plant operations, including through rebate programs that provide monetary rewards for firms who purchase and employ energy-efficient equipment in their facilities. This article presents a novel methodology for analyzing the cascading economic and environmental effects of an electric utility company's industrial energy-efficiency rebate programs and applies it to the case of a local utility located in the U.S. state of Ohio. It examines the utility's industrial rebate programs for lighting, motor, and heating, ventilation, and air conditioning (HVAC) systems and estimates the economic and environmental impacts of the programs using an input-output modeling framework. All three rebate programs provided a modest economic boost not only to directly involved equipment manufacturers and marketing service providers, but also to other upstream industries responding to the direct impact and the final demand augmented by the associated increase in value added in the regional economy. Emissions avoided as a result of electricity savings were found to outweigh additional emissions generated from the production of the energy-efficiency equipment in the region throughout the program years. However, if the full equipment purchase data were made available, the amount of added CO2 emissions would be larger.