National Efficiency Screening Project has released a comprehensive manual on cost-effectiveness evaluation for energy efficiency resources as an update to the California Standard Practice Manual. The authors of the report argue that although the California Standard Practice Manual (last updated in 2001) has “served as a prevailing resource,” the tests provided in the manual have not been applied consistently.
Highlights from the manual:
1. The foundational principle that a jurisdiction should articulate applicable policy goals when developing its primary cost-effectiveness test;
2. A framework for a jurisdiction to develop its own specific test(s) rather than using a set of pre-defined, prescriptive tests;
3. Information on efficiency resource costs and benefits, and how to treat relevant impacts when developing a cost-effectiveness test;
4. Guidance on how to account for hard-to-quantify costs and benefits; and
5. Suggested ways to develop inputs for cost-effectiveness tests, e.g., discount rates, early replacement of measures, free-riders, and spillover.