Contributing to a green energy economy? A macroeconomic analysis of an energy efficiency program operated by a Swiss utility

Abstract

In order to enhance energy efficiency as a pillar of transition to a green energy economy it is important to understand whether and under which conditions energy efficiency programs could have positive economic and social impacts. There are a growing number of studies on macroeconomic impacts of energy efficiency programs for various countries and regions. However, in Switzerland only few evaluations have been performed. The present study evaluates the impacts on GDP and employment of Geneva’s energy efficiency program portfolio éco21 which is operated by the local utility. Two programs aiming for electricity savings in the residential sector are analyzed: Eco-sociales targets social housing and Communs d’immeubles focuses on common spaces in buildings. An input–output model is developed, based on the Swiss input–output table, program administrator data, Swiss, and European statistics. Both impacts of initial expenditure and energy cost savings are evaluated. We estimate and compare the impacts of the two programs and discuss factors that cause differences. Our results show that energy efficiency programs can have positive impacts on GDP and employment. According to our estimates, each Swiss Franc (CHF) spent within the energy efficiency program creates approximately 0.2 CHF of additional GDP compared to the reference case scenario. Net impacts on employment are approximately 0.7 and 1.6 additional jobs in full-time equivalent for 1 million CHF of expenditure driven by Eco-sociales and Communs d’immeubles respectively, compared to the reference case scenario. However, the results strongly depend on several hypotheses, including the impact of energy savings on the domestic energy sector, the import share in consumed goods and services, electricity prices, lifetimes of energy efficiency measures, and the assumed expenditure patterns. Based on our results we provide recommendations on measures for improving the macroeconomic impacts of energy efficiency programs: a preference for expenditure on local goods and services, maximization of cost effectiveness of energy efficiency programs, and their integration with energy supply planning. We conclude that energy efficiency programs and policies should be well coordinated with other policies in practice, the roles of stakeholders should be clearly defined, and all stakeholders should be provided with necessary instruments and powers.