Carbon-Based Incentives: Aligning Utility Incentives with the Decarbonization Impacts of Efficiency and Electrification Measures

Ashley Muspratt1, Patrick Collins2, and Bill Bullock3
1Center for EcoTechnology, 2Shrewsbury Electric and Cable Operations, 3Massachusetts Municipal Wholesale Electric Company

Electric utilities are key player in the decarbonization of our economy.  They procure energy and determine the extent to which it is renewable, and they influence customer consumption through their marketing and incentive programs. Incentive programs from utilities can help raise awareness of and send market signals to customers about strategic electrification measures such as heat pumps, induction stoves, and electric yard equipment. Moreover, incentive programs from utilities can make these measures more affordable for customers.

With support from the American Public Power Association’s (APPA) Demonstration of Energy & Efficiency Developments (DEED) Program, the Center for EcoTechnology (CET) and the Massachusetts Municipal Wholesale Electric Company (MMWEC) built a model to aid MMWEC’s public utility members with setting energy efficiency and electrification incentives at levels that are fully aligned with the Commonwealth’s decarbonization objectives. The model uses carbon as the metric for deriving incentive levels and for comparing carbon benefits from a range of measure types, including efficiency, electrification, renewable energy, demand response, and storage. In addition to the carbon analysis, the model also calculates economic impacts of installed measures for the customer and utility. By adopting this approach to setting incentives, utilities will help climate-conscious (and wallet-conscious) customers prioritize measures and will optimize their programs for decarbonization, readying our building stock and vehicles for a fossil-fuel-free future.

Read the report embedded below or download hereopens PDF file .