Energy Efficiency Cost-Effectiveness Test

Part of the Green Energy and Technology book series (GREEN)


Cost-effectiveness for energy efficiency projects can be undertaken from at least five perspectives: participants (energy end users), energy utility, total customer of the utility, total customer and the utility together, and the society or the economy. The mathematical formulas to calculate the costs and benefits for the five tests are very similar, but some of the parameters have different meanings. In all cases, it is necessary to calculate net present value of a project over lifetime. This chapter presents basic formula for energy efficiency cost-effectiveness test from the perspective of participants or energy end users.


Energy Efficiency Discount Rate Payback Period Capital Budget Energy Efficiency Program 
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  1. CA (2010) California standard practice manual economic analysis of demand-side programs and projects, Oct 2001.
  2. Investopedia (2014) Discounted payback period. Cited on 11 Jan 2014
  3. U.S. EPA (2008) Understanding cost-effectiveness of energy efficiency programs: best practices, technical methods, and emerging issues for policy-makers, a resource of the national action plan for energy efficiency, Nov. Cited on 14 Jan 2014

Copyright information

© Springer-Verlag London 2015

Authors and Affiliations

  1. 1.3E&T InternationalBeijingChina
  2. 2.International Fund for China’s EnvironmentWashingtonUSA

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