Energy efficiency remains America's cheapest, cleanest and fastest energy source for five years running. That's the conclusion of a new study that shows that the utility cost per kilowatt-hour (kWh) of energy efficiency has held steady or even slightly declined at about 2.5 cents over the last half decade, even as the costs for new coal, nuclear, and other supply-side energy alternatives have risen.

In “Saving Energy Cost-Effectively: A National Review of the Cost of Energy Saved Through Utility-Sector Energy Efficiency Programs,” the American Council for an Energy-Efficient Economy (ACEEE) updates the organization's widely cited benchmark research of 2004 showing that the average cost of delivering energy efficiency programs in the U.S. was then 3 cents per kilowatt-hour.

The report notes: “In contrast, recent conventional energy supply-side options have typically cost between $0.07 and $0.15 per kWh — about three to four times the cost of energy efficiency investments … In 2008, pulverized coal cost between $0.07 and $0.14 per kWh, combined-cycle natural gas cost between $0.07 and $0.10 per kWh, and wind cost between $0.04 and $0.09 per kWh … Furthermore, as energy supply-side resource costs are highly volatile, energy efficiency remains a financially stable, long-term investment. In the near future, this cost picture will likely be very similar.” The U.S. Energy Information Administration (EIA) estimates that in 2020 new conventional power plants including coal and nuclear will cost about $0.10 per kWh, or four times higher than current energy efficiency program costs.

Maggie Eldridge, report co-author, ACEEE, said: “Our new findings have major implications for the U.S. Senate deliberations on climate legislation, the upcoming Copenhagen summit, and state-level decisions about other sources for new power generation. The data show conclusively why energy efficiency should be universally regarded as the ‘first fuel' in making energy decisions. It is cheaper, cleaner, faster and more easily realized than any other resource out there.”

The ACEEE report looks at energy efficiency programs from recent years in 14 states, with utility costs ranging from $0.016 to $0.033 per kWh and an average cost of $0.025 per kWh. ACEEE gathered data on energy efficiency program costs in 14 states — California, Connecticut, Iowa, Massachusetts, Minnesota, Nevada, New Mexico, New Jersey, New York, Oregon, Rhode Island, Texas, Vermont and Wisconsin. The six natural gas efficiency programs covered in the report also saved energy cost-effectively — spending $0.27 to $0.55 per therm, with an average of $0.37 per therm — less than a third of the average residential retail price seen over the past five years.

The full study findings are available online and can be downloaded for free at www.aceee.org/pubs/u092.htm.