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Energy Efficiency Versus Energy Conservation

Home Energy Efficiency - Site Energy Per Household 1980-2005

I recall a lot of talk in the early ‘90s about the ‘peace dividend’ and how we’d spend it. This new term entered our lexicon because of the fall of the Soviet Union and the supposed billions of dollars that would be freed up for better uses than the Cold War. It turns out that we never really saw such a ‘dividend,’ but the concept is an interesting one.

I recall a lot of talk in the early ‘90s about the ‘peace dividend’ and how we’d spend it. This new term entered our lexicon because of the fall of the Soviet Union and the supposed billions of dollars that would be freed up for better uses than the Cold War. It turns out that we never really saw such a ‘dividend,’ but the concept is an interesting one.

If we look at how we use energy, we can apply a similar term – the efficiency dividend. In the past 30 or 40 years, we’ve become much more efficient at how we use energy. In transportation, cars that used to get 10 to 20 miles per gallon now get  20 to 30 miles per gallon. We’re still using more fuel per person, though, because we drive bigger cars and more miles. In essence, we spent that efficiency dividend on SUVs and suburban houses.

With homes, we’ve also gotten more energy efficient without conserving energy. The energy we use in our homes, the site energy, has shown a slight downward trend since 1980, as shown below. (All residential data are from the US Energy Information Administration and are for single family, detached homes.) Note that the downward trend here is exaggerated because the vertical axis doesn’t start at zero. This energy is the kilowatt-hours of electricity, therms of natural gas, and gallons of fuel oil and propane that we pay for.


When we consider the total amount of energy that goes into our homes, factoring in the energy of the fuel burned at power plants that never makes it to our homes, the trend is flat. Since 1980 our primary energy use has stayed constant, as shown below.

home energy efficiency - primary energy use per household, 1980-2005


Our homes are much more efficient now, but we’ve spent the efficiency dividend on bigger houses with fewer people in them. From 1980 to 2005, our homes have gotten 37% larger while we dropped the average number of people per household by 10%. The result is that each person has 53% more conditioned floor area to live in. The table below summarizes the results.

   1980  2005 % Change

Square Feet per Household

2131 2919   +37
People per Household   3.0   2.7    -10
Square Feet per Person   702 1071   +53


When I talk to people about home energy usage, I often explain the difference between energy efficiency and energy conservation. Yes, you can build a 15,000 square foot ENERGY STAR home, and you can reduce the energy usage per square foot down to a small number, but the truth is that you’ll still have a lot of energy usage because of all those square feet.

In other words, don’t lose sight of the forest for the trees. Home energy efficiency is the trees. Energy conservation is the forest. If you’re building a house, build the smallest house you think you can possibly live in. It’s still possible to live well in a small house. I’ll be discussing some ideas on how to do so in future articles in this blog.

This Post Has 10 Comments

  1. Hi Allison 

    Hi Allison 
    Great post. I really appreciate the ” long view” perspective you’ve taken here. The idea of an effficiency dividend is compelling as both a personal and national agenda. If homeowners save thousands from performance retrofits, how are they going to spend it? Hope not by continuing to be SUVs, McMansions and, I would add, power-guzzling HDTVs. It begs the question: can policy makers and green marketers influence the purchase (or savings and re-investment) decisions that homeowners plan for energy efficiency dividends?  

  2. Also, one of the allures of
    Also, one of the allures of energy efficiency to consumers is that they don’t need to give anything up. Substitute versions of the same product exist that use less energy, and maybe cost a premium.  
    The message of conservation, by comparison, implies sacrifice, which is really really difficult for consumers to get behind. (They’re called consumers for a reason 😉 
    Maybe the concept of an energy dividend can bridge this discord.

  3. Good points, Alex. Especially
    Good points, Alex. Especially with the Weatherization work that’s been done in the past year and Home Star on the horizon, the energy efficiency dividend is an important issue. I think most of us, myself included a lot of times, make decisions based on short term thinking.  
    The problem with that now is that I believe we’re about to see energy costs rise far higher than many people expect. The good news is that the economic downturn of the past few years has helped people go into belt-tightening mode. It’ll be interesting to see how it all plays out.  
    I think the work we’re doing to reduce energy usage in buildings is crucial because building are responsible for nearly half of all the energy consumption in the US. As our transportation system electrifies because of peak-oil induced high gasoline prices, that’s going to put a big strain on our electricity grid and raise prices for the electricity we use at home. 
    I think the economic downturn has helped to make sacrifice a bit more palatable, mainly out of necessity, but still, it’s a positive sign. We can’t keep growing, expanding, and using more energy ad infinitum.

  4. Energy conservation is hard
    Energy conservation is hard for all of us. We have been consumers for a very long time (at least 3 generations). You’re right, energy efficiency alone won’t cut it. We in the energy efficiency field will have to be examples of energy conservation.

  5. Hello Allison,  &lt
    Hello Allison, 
    This is a great view of the past 3 decades. It is clear from your data, that even with the advances in equipment efficiencies and other efficiencies gained in the building process, we have not reduced our dependence, or need for the electricity. I also agree with you that with the growing push toward “plug-in” cars, which KB Homes is now offering an upgrade to have your garage wired and ready for a plug-in, the demand will surely rise which will take prices up by itself, even without any cap-and-trade legislation. I do hope this downturn doesn’t get wasted with the opportunity to change. It is time for us to have what we need, save and use wisely what we buy, and care for the future by acting properly today. Our consumption society needs to take off the short-term goggles and realize that changes today will help make a better tomorrow. 

  6. “We can’t keep growing,
    “We can’t keep growing, expanding, and using more energy ad infinitum.” 
    True… but reading about Jevons Paradox today made me realize how hard it will be. 
    “In economics, the Jevons paradox (sometimes called the Jevons effect) is the proposition that technological progress that increases the efficiency with which a resource is used, tends to increase (rather than decrease) the rate of consumption of that resource.” 
    In other words, the more we conserve, the more we consume.

  7. Ah, yes, the Jevons Paradox
    Ah, yes, the Jevons Paradox does lead to greater and greater energy use. A finite planet, however, prevents us from doing that forever and ever. Jevons’s Paradox may lead us into overshoot, but it can’t keep us growing indefinitely. 
    As Kenneth Boulding said, “Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist.”

  8. Excellent post … perhaps
    Excellent post … perhaps your best yet … compact, concise, insightful & well delivered

  9. To add up, buying energy
    To add up, buying energy-efficient products alone is not enough to reduce the consumption of energy. I think, discipline in using the appliances would add up as a factor too. Because no matter how energy-efficient your appliance maybe, if you still abuse the usage of it, the energy-efficiency defeats it’s purpose.

  10. Tom, you’re absolutely
    Tom, you’re absolutely correct. Behavior is an important factor in conservation, and it goes beyond purchasing energy efficient appliances or small houses.

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