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Energy Efficiency Explained: Less Power, Same Output, Healthier Planet

Energy efficiency means using less power to get the same output, which can lower utility bills and reduce greenhouse gas emissions—helping fight global warming and contributing to a healthier planet.
A corporate office building with all of its lights on.

Millions of American individuals and businesses invest in energy efficiency every year. Using power and other resources efficiently translates into a cost-effective way to lower household power bills, reduce business operating costs, fight climate change, and preserve the natural environment. Find out how to improve energy efficiency, why it's essential, and how renewable energy offers an energy-efficient solution.

What is energy efficiency?

Energy efficiency refers to using less power to accomplish the same amount of work, or to achieve the same output. Optimizing the source, production, storage, and use of energy translates into lower electricity costs and reduced environmental pollution thanks to fewer greenhouse gas emissions that contribute to climate change. For example, a well-insulated home can mean it's possible to keep the thermostat set at a comfortable temperature without high electric bills, so occupants can keep their sweaters in the closet. Making sure your insulation is effective is a form of energy efficiency.

Sometimes people use terms like energy efficiency and energy conservation interchangeably. But more precisely, energy conservation refers to actually using less generated power, which might mean reducing the amount of work. For instance, turning the thermostat down and wearing a sweater around the house in the winter is an example of energy conservation but not energy efficiency.

A smart thermostat on the wall inside a home.

Examples of energy efficiency

Optimizing energy efficiency at home

ENERGY STAR says upgrading to ENERGY STAR-appliances could save the average household 24% on their power bill. Some everyday examples of energy-efficient home upgrades include:

  • Lighting: LED light bulbs can produce the same illumination as an old-style incandescent bulb. Meanwhile, modern light bulbs consume as little as 10% to 30% of the power of an old-fashioned bulb or CFL bulb. Smart light bulbs let users control them remotely via home automation or phone apps. They can help save energy and improve security.
  • Insulated windows, doors, and skylights: The U.S. Department of Energy (DOE) calculates that homes could save as much as $583 and 6,000 pounds of CO2 emissions by replacing old, single-pane windows with efficient ones. Other benefits of insulating windows and doors include increased comfort and reduction of UV rays that can damage some personal property.
  • Insulation: Weatherstripping to prevent drafts caused by poor seals in windows and doors costs very little, is easy to install, and helps conserve energy and make rooms more comfortable. Better insulation for the attic, basement or an attached garage may require professional installation, but according to Forbes, it can pay for itself in energy savings within a few years.
  • Smart thermostats: Users can control smart thermostats remotely with apps or program them to automatically adjust themselves at certain times. For instance, these computer-powered thermostats can lower the heat when everybody leaves for school or work and increase it to a more comfortable level before the family returns home.

Taking even relatively small steps at home can go a long way. Energy efficiency provides such benefits as saving money, making rooms easier to heat and cool, and working with others to help preserve the environment and climate.

McDonald’s and Microsoft, among others, setting strong corporate examples

Due to their larger footprint and broader scale influence, companies can make changes with an even more significant potential impact than individuals. For instance, Forbes highlighted McDonald's because the fast-food chain switched to energy-efficient restaurant appliances to reduce wasted power by 25%.

Also, Microsoft charges departments an internal carbon fee to incentivize them to curtail emissions through more efficient energy usage. The tech company vows to cut its overall carbon footprint by at least 75% by 2030.

Why is energy efficiency important?

According to the U.S. Environmental Protection Agency (EPA), energy efficiency often offers the most cost-effective and rapid way to enjoy these benefits:

  • Environmental protection: Consuming less power reduces pollutants and greenhouse gas emissions because you’re reducing the overall level of energy consumption coming from harmful, nonrenewable resources like fossil fuels.
  • Economic enhancement: Using less power reduces concerns over unpredictable energy prices and foreign fuel sources for power plants. Energy efficiency also helps reduce utility bills, which can help stretch personal and business budgets.
  • Infrastructure optimization: Better energy efficiency can stretch existing infrastructure to reduce investments needed to keep up with power demand.
  • Risk management: Energy efficiency will help hedge against market instability and periodic demand peaks.

How does energy efficiency protect the natural environment?

The National Resources Defense Council (NRDC) says that energy efficiency offers an effective and often underappreciated tool to curb waste and pollution.

For instance, the NRDC mentioned efficient appliances and better insulation could reduce annual carbon emissions by 550 million metric tons by 2050. To put that in jaw-dropping context, the electric grids of California, New York, Texas, Virginia, and Florida emit about this amount of CO2 each year!

Thick electrical tubing and wires on the exterior of a commercial building.

Residential vs. commercial energy efficiency

Energy efficiency in residential and commercial buildings will yield dramatic results for saving money and cutting pollution and emissions. Residential and commercial buildings account for about 40% of U.S. energy use. Both residential and commercial sectors have progressed in the past decade to utilize power more efficiently.

At the same time, each of these kinds of buildings tends to use energy somewhat differently.

  • Heating accounts for 43% of the power used in residential buildings but only 25% in commercial buildings.
  • In contrast, lighting accounts for twice as much energy use in commercial buildings than residential ones.
  • Similarly, residential buildings tend to use more hot water than commercial buildings.

Energy codes for residential and commercial buildings

Building codes for energy use, often called energy codes, can vary by the local area and have certainly changed over time. According to the National Association of Home Builders, some widely accepted codes include the International Energy Conservation Code (IECC) for residential buildings and the American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) for commercial buildings.

The organizations publish new versions of their energy codes every three years. The DOE reviews them to determine which changes would lead to greater efficiency, and then they include new requirements in the State Certifications Fact Sheet. States have two years to review these revisions. Each state must update commercial energy codes but isn't required to conform to residential codes. These codes apply to new and renovated buildings.

Benefits of adhering to energy codes

Building Enclosures Magazine discussed the benefits of energy codes by first observing that buildings might last for several decades or even over a century after initial construction or renovations. Thus, incorporating energy efficiency requirements into the building's design will make it cheaper to power these buildings for an extremely long time.

Estimates of the benefits of adhering to energy codes include:

  • Buildings that conform to energy codes can use 40% less energy than non-conforming buildings.
  • This reduced energy consumption will translate to $126 billion saved between 2010 and 2040.
A three-bladed wind turbine high in the sky with cloud covering around it.

The efficiency debate of renewable energy

The U.S. Energy Information Administration (EIA) expects renewables to fuel about 22% of American energy needs in 2022, with about two percent growth per year anticipated in the near future. More efficient use of power will enable faster realization of a 100% renewable energy future.

These energy sources like solar, wind, hydroelectric, and even tidal power rely on renewable resources—sunlight, wind, water flow and the tides, respectively. Thus, they don't deplete resources, as oil and coal do. They also work cleanly, without contaminating the water, land, or air or contributing to climate change.

These benefits don't necessarily guarantee that all renewable energy is always an efficient energy source. There are skeptics and optimists about the efficiency of renewables, but there’s no doubt that the world must transition to cleaner energy—our planet depends on it.

The Yale School of the Environment blog discussed some of the criticisms of the efficiency of renewable energy, and how they dispute these claims with existing evidence.

Problem: Grids that rely on renewable energy will prove unreliable

  • Yale's counter: Half of Germany's power comes from renewable sources, but they enjoy the world's most reliable grid with an interruption index of just .25 hours. In contrast, the U.S. gets about 20% of its energy from renewables and suffers from an interruption index of 1.28.

Problem: Even countries like Germany need to rely on fossil fuels to stabilize the grid

  • Yale's counter: Between 2010 and 2020, Germany's use of fossil fuels and nuclear power declined by over 200 terawatt-hours. Renewables and energy efficiency measures more than made up the gap, and emissions dropped to pre-2010 levels. Similarly, Japan closed 40 nuclear plants after the Fukushima disaster, and renewables and energy efficiency replaced virtually all energy supplies.

Problem: Solar and wind power only work intermittently

  • Yale's counter: Generating solar power indeed takes sunshine. Wind turbines only work when the wind blows. And droughts can disrupt hydropower. Managing an energy grid presents a challenge because no known energy source functions 24-7. Average nuclear plants go offline seven to 12 percent of the time, and fossil fuel plants also suffer from breakdowns, weather events, and supply shortages. A 24-7 grid requires backup plans.

Managing grids must account for intermittent slowdowns and fluctuating demand. Solutions can include backup power sources, storing power during peak production, and using energy efficiently to level demand. Thus, renewables can offer an efficient solution without many fossil and nuclear power pitfalls.

A modern washing machine in a home.

Opportunities for improving energy efficiency

If you get the opportunity to build or renovate an energy-efficient home or a commercial or government building, take advantage. The planet will thank you. But still, almost everybody can find opportunities to promote or employ more efficient use of power.

Behavioral changes and home improvements

Exercising more mindfulness about energy usage can make a significant difference. But simple measures you thought might be helping—like shutting off appliances and electronics when not used—may not actually be as beneficial as we’ve been led to believe.

The New York Times reported that many appliances still draw power when turned off. For instance, the reporter tested these electronics and appliances:

  • LG washing machine: The washing machine pulled 7W when turned on but not running and 4W when turned off.
  • Apple TV: The TV drew 21W when turned on and 17W when turned off.
  • Samsung cable box: The cable box used 28W on and 26W off.
  • Apple Mac: The computer consumed 48W when open or closed and charging and 27W when open and fully charged.

So your best bet is to fully unplug appliances and devices when not in use.

If this is a struggle or you simply keep forgetting, smart power strips can automatically shut the power down to electronics when they're turned off or be programmed to turn off at certain times, like during sleeping hours.

Residents don't need to do everything at once but can take measures as opportunities arise. Weatherstripping, adding insulation, replacing older appliances with energy-efficient ones, and investing in smart thermostats and other home automation also contribute to energy efficiency. Even better, many of these improvements pay for themselves with energy savings over time.

Municipal management facilities

Just like individuals, many city and county governments struggle with budgets. Saving money and avoiding the costs associated with environmental damage should incentivize municipalities to employ energy-saving strategies in buildings, water management, and power generation.

The U.S. Environmental Protection Agency (EPA) offers local governments ample guidance, including energy management guidelines, benchmarking tools, a building upgrade manual, and more. Residents should encourage local officials to familiarize themselves with and use these resources and assess candidates on their concerns over energy efficiency.

The future of energy efficiency

Everybody can take measures at home and at work to improve energy efficiency. Modest contributions can add up to make a difference in the battle against climate change and environmental protection. Plus, these measures offer the incentive of additional savings on your next power bill.

At the same time, the World Economic Forum (WEF) pointed out that buildings consume 40 percent of global energy and generate about one-third of all greenhouse gas emissions. With that in mind, the WEF states that ensuring buildings' energy efficiency and sustainability holds an essential key to tackling climate change, saving money, encouraging green energy, and reducing pollution. As well as finding sources of energy waste around the house, it's vital that businesses and political leaders understand the importance of energy efficiency.

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