The findings suggest that the upfront investment costs are about twice the actual energy savings

I have been interested in alternative energy sources, energy efficiency and conservation since my college days in the latter part of the last century (to provide a patina of age). I elected not to pursue a career in the field as my assessment was that the economics and technology, while progressing, still did not make a compelling case. But even then I was too optimistic. I was thinking that we would get to competitive levels of efficiency within a couple of decades. We're still waiting and we are still paying subsidies to big corporations to produce solutions that aren't competitive.

In the most recent great recession, it was interesting that as municipalities became increasingly desperate in their tightened financial circumstances, one of the first programs on the chopping block were recycling programs. Nice in concept but they still do not pay their way after all these years. Many of these programs have been tarred with the brush of crony capitalism - using the coercive power of government to press resources into the hands of some favored insiders to pursue activities that are not in themselves desired by anyone.

So I am accustomed to having a somewhat jaundiced view of claims in this area. That still did not prepare me for this research result. I hope it is wrong but, if not, this is an incredible waste of scarce resources. From Do Energy Efficiency Investments Deliver? Evidence from the Weatherization Assistance Program by Meredith Fowlie, Michael Greenstone, Catherine Wolfram.

Conventional wisdom suggests that energy efficiency (EE) policies are beneficial because they induce investments that pay for themselves and lead to emissions reductions. However, this belief is primarily based on projections from engineering models. This paper reports on the results of an experimental evaluation of the nation’s largest residential EE program conducted on a sample of more than 30,000 households. The findings suggest that the upfront investment costs are about twice the actual energy savings. Further, the model-projected savings are roughly 2.5 times the actual savings. While this might be attributed to the “rebound” effect – when demand for energy end uses increases as a result of greater efficiency – the paper fails to find evidence of significantly higher indoor temperatures at weatherized homes. Even when accounting for the broader societal benefits of energy efficiency investments, the costs still substantially outweigh the benefits; the average rate of return is approximately -9.5% annually.