M&V 2.0 is Enabling a Negawatt Market

by Woodson Powell

California’s Senate Bill 350 (SB-350), passed in 2015, sets state targets of a 50% increase in building energy efficiency and 50% of electricity generated by renewables, both by 2030 [http://www.efficiency.org/negawatt-blog/new-california-laws-are-a-needed-paradigm-shift-for-energy-efficiency]. Most interestingly though, SB-350 proposes tracking efficiency by meter-based savings and authorizing pay-for-performance programs that are coupled with incentives for those savings. These changes are known as Measurement and Verification (M&V) 2.0, as first noted in 2014 [http://www.elp.com/Electric-Light-Power-Newsletter/articles/2014/02/em-v-2-0-new-tools-for-measuring-energy-efficiency-program-savings.html]. Using interval data, project savings determined from measured performance provide the ability to accurately value the benefits of energy efficiency, as opposed to the previous practice of using monthly utility data, which make it less clear to do a cause and effect analysis. For example, hour-to-hour measurements are much more informative, because it is easier to deduce what factors impacted energy savings during that interval. This change has created what is called a “Negawatt” market. Continue reading