Energy-efficient buildings: institutional barriers and opportunities : Strategic Issues Paper

E Source's detailed technical assessment of electricity use for space cooling and air handling identified large and untapped opportunities for electricity savings in buildings. Well over half of the energy used to cool and ventilate buildings in countries like the US can be saved by improvements that typically repay their cost within a few years. This opportunity is especially important for electric utilities, since space cooling represents 44 percent of US noncoincident peak load. Previous analyses have found comparable potential savings in lighting, drivepower, office equipment and other end-uses. To a theoretical economist, these are astoundings statements: it is inconceivable that in a market economy, such large and profitable savings would remain untapped. But to a practitioner who knows how buildings are created and run, it is not only conceivable but obvious. This strategic issues paper explores why such a massive market failure has occurred, and what to do about it.