New McKinsey Study on Cost Effective Energy Measures – $1.2 Trillion from Commercial and Residential


US_energy_efficiency_full_reportNew McKinsey Study on Cost Effective Energy Measures

A new study from McKinsey finds that a comprehensive program of cost-effective energy efficiency measures could reduce US annual energy consumption by 23 percent by 2020. This reduction in energy use would require a $520 billion investment but save $1.2 trillion in energy costs (these figures are discounted to present dollars).

McKinsey estimates that 65 percent of these savings would come from improvements made to the industrial and commercial sector; the remaining 35 percent would come from residential improvements.

According to the report, these impressive results would require an annual investment of approximately $50 billion in energy efficiency – an increase of 400 to 500 percent over US spending on energy efficiency in 2008. McKinsey recommends a “Holistic Implementation Strategy” to rapidly scale this increase in energy efficiency investment. This strategy requires recognition across all sectors of the economy that energy efficiency is a critical component to meeting the country’s energy needs while the United States transitions to low carbon energy sources. The strategy also requires public and private sector support to develop innovative funding vehicles and strengthen national building codes. Finally, all stakeholders in the energy economy will need to align in a common pursuit of increased energy efficiency.

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