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April 21, 2014

Extending residential energy policies affects some end uses more than others

graph of change in residential delivered energy consumption for selected end uses, as explained in the article text
Source: U.S. Energy Information Administration, Annual Energy Outlook 2014, Issues in Focus

Many federal energy programs target residential consumption, such as appliance standards, building energy codes, and tax credits for energy efficient equipment. Because the Annual Energy Outlook 2014 (AEO2014) Reference case is intended to reflect current laws and regulations, two side cases show the effects of the continued availability of incentives and further strengthening of standards beyond levels already established under existing laws or regulations. A broader analysis is included in an Issues in Focus article released today; this article highlights residential sector impacts.

These policies tend to affect certain end uses more than others. For instance, energy consumption by residential space cooling equipment (air conditioners) is projected to increase in the Reference case projection by about 45% from 2012 to 2040 mainly because of the growth in the number of households, growth in the size of homes, and population movements to warmer climates.

The federal tax credits extended in the No Sunset case work to reduce this growth in space cooling consumption by incentivizing ground-source heat pumps, more efficient central air conditioners and air-source heat pumps, as well as reducing the need for space cooling by promoting better insulated buildings. Space cooling consumption still rises from 2012 to 2040, but only 28% instead of 45%.

The efficiency assumptions in the Extended Policies case affect cooling in a different way: by raising minimum efficiency levels of central air conditioners, room air conditioners, and air-source heat pumps through future regulatory actions to strengthen appliance standards. This case also assumes that national building energy codes and increased compliance efforts improve the energy characteristics of new residential construction, thus reducing the need for air conditioning. Even with these improvements, cooling consumption still increases, but only by 20%. Because the number of households is growing by almost 26% within this time frame, space cooling consumption on a per-household basis actually declines in the Extended Policies case.

As with air conditioners, space heating and water heating equipment are also affected by extending tax credits and advancing appliance standards. Other end uses show little difference across scenarios. Televisions, personal computers (PCs), and related equipment (e.g., home theater systems, set-top boxes, and network devices) are not currently affected by these policies, as there are neither federal tax credits for these appliances nor any national appliance standards in effect for the devices in this category.

More information about the policy assumptions and their energy impacts can be found in the AEO2014 Issues in Focus article on the No Sunset and Extended Policies cases.

Principal contributor: Owen Comstock