Cost of Conservation

The Ohio Environmental Council has come up with an estimate of the cost of conserving electricity. They argue that energy saved is freed for use elsewhere. In essence, conservation creates energy.

To understand their thinking, consider a 25 W CFL bulb replacing a 100 W incandescent bulb. If the CFL burns for 8000 hrs, it saves 75*8000/1000 kW = 600 kWh. If the CFL bulb costs $6, it frees up (‘creates’) 600 kWh. So the cost of conservation is $6/600 or 1 cent/kWh.

OEC actually estimates the average cost to be somewhat higher if they average all energy-saving equipment, about 2.25 cents/kWh. I like to think that a saving is a saving and that people will save enough that the freed-up energy never needs to be generated.