Power Sector Reforms and Residential Energy Efficiency Programs

Energy efficiency plays a central role in promoting sustainable development. Energy efficiency programs particularly those targeting the residential sector are considered a public benefit since they generate public benefit outcomes such as economic prosperity, social equity and environmental sustainability. More often, the public benefit derived from these programs is greater than the private benefit. The reforms in the power supply industry in both developed and developing countries initially show that energy efficiency programs in general, and residential energy efficiency programs in particular are being threatened by these reforms since private market players do not prioritize public benefit investments. The paper reviews how different levels of reforms affected residential energy efficiency investments and discusses experiences and approaches in the UK, US and Brazil. With several developing countries undertaking reforms in their electricity supply industries, the paper presents fundamental elements such as robust policy and legislation, enforceable regulation, funding stability, institutional support and adequate capacity, in order to promote residential energy efficiency in reformed electricity markets.