State Energy Efficiency Policy in a New Era: A Toolkit for Governors

Governors’ leadership on energy offers cost savings, job creation, reduced energy consumption, pollution prevention, and strengthened grid security.


2020 Levelized Cost of Generating Electricity. Source: Lazard and ACEEE.

Governors support energy efficiency for a variety of benefits: to reduce energy waste and save costs on meeting state decarbonization goals, to enhance energy reliability and resiliency, to reduce air pollution and improve public health, and to foster economic development. Energy efficiency is defined as reducing energy consumption while maintaining the same level of performance. Over the last 20 years, energy intensity, or energy use relative to economic output, has been reduced by half, and is expected to decrease at an average annual rate of 1.5 percent through 2050. Energy efficiency plays an important role in meeting state energy and environmental goals. Now, in addition to traditional energy efficiency measures that are often thought of as LED lighting and energy efficient appliances, new digital and data-driven solutions, such as building automation, are creating new opportunities for Governors and state energy policymakers to pursue.

Energy efficiency measures and their resulting emissions reductions are vital to meeting ambitious state and federal decarbonization goals. Sixteen Governors plus D.C. have ordered or signed into law 100 percent clean energy or zero-carbon electricity generation goals. The Biden-Harris Administration has also established decarbonization targets and prioritized energy efficiency by executive order putting “the United States on a path to achieve net-zero emissions, economy-wide, by no later than 2050” and setting energy efficiency and renewable energy investment priorities for environmental justice priorities.

To take advantage of opportunities to reduce energy consumption, Governors have a robust set of policy levers and tools they can consider, which are further discussed in the toolkit.