Boosting Energy Efficiency Deployment in the U.S. Industrial Sector

While energy efficiency (EE) has been identified as one of the most cost-effective and sustainable solutions to increasing the competitiveness of American businesses and mitigating climate change impacts, its potential is yet to be fully realized. This is particularly true for the U.S. industrial sector, which consumes about a third of all primary energy in the U.S. and has lagged in adopting EE measures. Given this vastly unrealized potential, NRDC has asked the SIPA Capstone team to develop an actionable plan to bring manufacturers, nonprofits, and regulators together to boost process-based industrial energy efficiency.

While it is often believed that that the lack of industrial EE uptake stems from capital constraints and management demand for short payback periods, the project findings yield a more nuanced picture, based on analysis of existing literature on the topic, as well as over 20 interviews the SIPA team conducted with practitioners, policymakers, and industrial organizations. The project report finds that industrial EE may be boosted by reducing industrial management’s perceived risk of investment, organizing available information to be readily accessible, and increasing both industrial management attention and staff availability. These findings underpin the recommendations provided to NRDC. Enhanced industrial EE would bring U.S. industry closer to achieving the estimated $47 billion in cost savings estimated by McKinsey as being left on the table, as well as help create jobs, reduce greenhouse gas emissions, and increase U.S. industrial competitiveness.