Energy Efficiency & Demand Response KPIs by Sector
Essential KPIs for energy efficiency programs and demand response participation, with 2024-2025 benchmark ranges across sectors and guidance on verified savings measurement.
Energy efficiency remains the cheapest, fastest, and most scalable climate solution. The IEA estimates that efficiency improvements could deliver 40% of emissions reductions needed for net zero. Demand response—shifting or reducing electricity consumption in response to grid signals—adds value by enabling higher renewable penetration and avoiding grid infrastructure investments. This benchmark deck provides the KPIs that matter for both efficiency and flexibility, with ranges drawn from 2024-2025 programs across sectors.
The Twin Opportunities
Energy efficiency saves money while reducing emissions. McKinsey's 2024 analysis found that efficiency investments average 20-30% returns through reduced energy costs—outperforming most capital investments. Yet the "efficiency gap" persists: economically rational investments go unmade due to split incentives, information gaps, and capital constraints.
Demand response creates additional value by providing grid services. PJM (US regional grid) paid $2 billion to demand response resources in 2024. California's CAISO relies on demand response for 4-6% of peak capacity. As grids integrate more variable renewables, flexibility value is increasing.
The convergence matters: efficient buildings with smart controls can both reduce total consumption and shift remaining consumption to optimal times. This combined approach maximizes economic and environmental value.
The 8 KPIs That Matter
1. Energy Use Intensity (EUI)
Definition: Energy consumption normalized by floor area (kWh/m² or kBtu/sqft annually).
| Building Type | Bottom Quartile | Median | Top Quartile | Best Practice |
|---|---|---|---|---|
| Office (Standard) | >250 kWh/m² | 180-220 | 120-160 | <80 |
| Office (Data-Intensive) | >350 | 250-320 | 180-240 | <140 |
| Retail (Grocery) | >500 | 380-450 | 280-360 | <220 |
| Retail (Other) | >300 | 200-270 | 140-190 | <100 |
| Healthcare (Hospital) | >400 | 300-380 | 220-290 | <180 |
| Education (School) | >180 | 130-170 | 90-125 | <70 |
| Industrial (Mfg) | >400 | 280-380 | 180-260 | <150 |
| Data Center | PUE-based | - | - | See PUE |
Normalization essential: Raw EUI comparisons across buildings are misleading. Adjust for climate (heating/cooling degree days), occupancy hours, and activity type.
2. Verified Energy Savings
Definition: Reduction in energy consumption verified through measurement and verification (M&V) protocols.
| Measure Type | Typical Savings Range | Persistence (Year 5) | M&V Complexity |
|---|---|---|---|
| Lighting (LED) | 40-70% of lighting | 95%+ | Low |
| HVAC Controls | 10-25% of HVAC | 70-85% | Medium |
| HVAC Equipment | 15-35% of HVAC | 80-90% | Medium |
| Building Envelope | 10-25% of heating/cooling | 95%+ | High |
| Comprehensive Retrofit | 25-45% of total | 75-85% | High |
| Industrial Process | 8-20% of process | 80-90% | High |
| Verification Level | Method | Accuracy | Cost |
|---|---|---|---|
| IPMVP Option A | Key parameter measurement | ±15-25% | Low |
| IPMVP Option B | Full system measurement | ±10-15% | Medium |
| IPMVP Option C | Whole building calibrated | ±5-10% | Medium-High |
| IPMVP Option D | Calibrated simulation | ±8-12% | High |
3. Demand Response Capacity
Definition: Load reduction capability that can be reliably dispatched during grid events.
| Sector | Typical DR Capacity | Response Time | Duration Capability |
|---|---|---|---|
| Commercial HVAC | 15-30% of peak | 5-15 minutes | 2-4 hours |
| Industrial Process | 10-40% of load | 15-60 minutes | 1-4 hours |
| Data Center | 5-15% of load | 5-30 minutes | 1-2 hours |
| Refrigeration (Cold Storage) | 30-60% of load | 5-15 minutes | 4-8 hours |
| Water Heating | 50-80% of load | <5 minutes | 4-12 hours |
| EV Charging | 40-90% of load | <1 minute | Unlimited |
Firm vs. interruptible: Not all DR capacity is equally reliable. Measure both maximum capability and firm (guaranteed) capacity under various conditions.
4. Load Flexibility Index
Definition: Percentage of total load that can be shifted or curtailed without operational impact.
| Building Type | Shiftable Load | Curtailable Load | Total Flexibility |
|---|---|---|---|
| Office (Standard) | 15-25% | 10-20% | 25-40% |
| Retail | 10-20% | 8-15% | 18-30% |
| Industrial (Batch) | 25-50% | 15-30% | 40-70% |
| Industrial (Continuous) | 5-15% | 5-15% | 10-25% |
| Data Center | 10-20% | 5-10% | 15-25% |
| Cold Storage | 35-60% | 20-40% | 50-80% |
Thermal mass opportunity: Buildings with significant thermal mass (concrete, water storage) can shift HVAC load for hours without comfort impact. Pre-cooling/pre-heating unlocks this flexibility.
5. Peak Demand Reduction
Definition: Reduction in maximum demand (kW) during grid peak periods or facility billing peaks.
| Strategy | Typical Peak Reduction | Payback Period |
|---|---|---|
| Demand Limiting Controls | 8-18% | 1-3 years |
| Thermal Storage (Ice/Chilled Water) | 20-40% | 4-8 years |
| Battery Storage | 15-50% | 6-12 years |
| Load Scheduling | 10-25% | <1 year |
| Distributed Generation | 20-50% | 5-10 years |
Demand charge savings: For commercial/industrial customers, demand charges can represent 30-50% of electricity bills. Peak reduction strategies often have faster payback than efficiency measures.
6. Grid Carbon Reduction from Flexibility
Definition: Emissions avoided by shifting consumption from high-carbon to low-carbon grid periods.
| Grid Type | Shift Potential | Annual Emissions Reduction |
|---|---|---|
| High Renewables, Constrained | 4-8 hours/day | 15-35% of electricity emissions |
| Variable (Wind-Heavy) | Weather-dependent | 10-25% of electricity emissions |
| Peaking Gas | Aligned with peaks | 5-15% of electricity emissions |
| Baseload-Dominated | Limited | 3-8% of electricity emissions |
Real-time signals: Platforms like WattTime, Electricity Maps, and Tomorrow provide real-time marginal emissions data enabling carbon-aware load shifting. Organizations using these signals report 15-30% additional carbon reduction beyond efficiency.
7. Program Participation Rate
Definition: Percentage of eligible loads or facilities participating in efficiency/DR programs.
| Program Type | Typical Participation | Leading Programs |
|---|---|---|
| Utility Rebates | 15-30% of eligible | 40-60% |
| Performance Contracts | 5-12% of eligible | 20-35% |
| Demand Response (Paid) | 8-18% of eligible | 35-55% |
| Time-of-Use Tariffs | 20-40% of eligible | 60-80% |
| Automated DR (OpenADR) | 3-10% of DR capacity | 25-45% |
Barriers to participation: Program complexity (35% cite), upfront costs (28%), uncertainty about savings (20%), and split incentives (17%). Streamlined programs with guaranteed outcomes achieve higher participation.
8. Cost of Saved Energy (CSE)
Definition: Program cost per unit of energy saved over measure lifetime.
| Measure Category | CSE Range ($/MWh) | Comparison: New Supply |
|---|---|---|
| Behavioral Programs | $5-20 | Gas: $40-80 |
| Lighting Retrofit | $15-35 | Solar: $25-50 |
| HVAC Controls | $25-50 | Wind: $20-40 |
| HVAC Equipment | $40-75 | Grid Average: $50-100 |
| Building Envelope | $50-100 | Storage: $80-150 |
| Industrial Process | $20-60 | - |
Efficiency as resource: CSE under $50/MWh is competitive with or cheaper than new generation. Utilities and grid operators increasingly treat efficiency as a supply resource in integrated planning.
What's Working in 2024-2025
Automated Demand Response (OpenADR)
Automated systems that receive grid signals and adjust loads without human intervention achieve 3-5x higher response reliability than manual programs. Adoption is accelerating: California now has 2+ GW of automated DR capacity.
The technology enables new value streams. Buildings with OpenADR capability can participate in frequency regulation, capacity markets, and real-time energy markets—stacking multiple revenue sources.
Pay-for-Performance Efficiency
Traditional rebate programs pay for installed measures regardless of actual performance. Pay-for-performance models (metered efficiency) pay for verified savings, shifting risk from utilities to implementers. These programs achieve 20-30% higher actual savings than deemed savings approaches.
Key enabler: advanced metering infrastructure (AMI) and M&V 2.0 platforms that automate savings verification at scale.
Grid-Interactive Efficient Buildings (GEBs)
The Department of Energy's GEB framework combines efficiency, flexibility, and automation. Buildings designed to GEB specifications can reduce energy use 20-40% while providing grid services worth $50-150 per kW-year.
Early implementations show that integrated approaches—where efficiency and flexibility are designed together—outperform sequential approaches (efficiency first, then add flexibility).
What Isn't Working
Split Incentive Persistence
Building owners who don't pay energy bills lack motivation to invest in efficiency. Tenants who pay bills can't modify building systems. This "split incentive" affects 40-50% of commercial buildings. Green lease clauses that share savings between owner and tenant help but remain rare (<10% of leases).
M&V Complexity and Cost
Rigorous savings verification costs 3-8% of project value—often exceeding implementer margins. This creates incentive to simplify M&V, which reduces accuracy and confidence in results. New automated M&V approaches promise 10x cost reduction but are not yet widely adopted.
DR Program Fatigue
Frequent demand response events (>30 per year) cause participant fatigue and declining response. Programs with aggressive dispatch exhaust participant willingness. Sustainable programs limit events to 20-30 per year with predictable scheduling.
Key Players
Established Leaders
- Siemens — Global leader in building automation and demand response through Decentralized Energy Management Systems (DEMS). Provides virtual power plant solutions for grid flexibility.
- Schneider Electric — Comprehensive building energy management systems including EcoStruxure platform for demand response participation. Major presence in commercial and industrial efficiency.
- Johnson Controls — Building automation and HVAC controls with integrated demand response capabilities. OpenBlue platform for smart building optimization.
- ABB — Industrial energy efficiency and grid automation solutions. Leading patent filer in demand response systems.
Emerging Startups
- Voltus — Commercial and industrial demand response aggregator connecting manufacturing, retail, and healthcare facilities to grid markets. Platform enables participation in capacity, ancillary, and energy markets.
- OhmConnect — California-based residential demand response company using gamification and rewards to engage consumers. Software-based "virtual power plant" approach.
- Base Power — Texas-based home battery and demand response company. Raised $600M Series D (December 2024), $1B total funding. Building residential virtual power plant network.
- Leap — Software platform connecting distributed energy resources to wholesale electricity markets. Enables automated demand response participation.
Key Investors & Funders
- Coatue Management — Lead investor in Base Power's $600M Series D round.
- Energy Impact Partners — Major investor in demand response and grid flexibility startups.
- US Department of Energy — Funding Grid-Interactive Efficient Buildings (GEB) research and demonstration programs.
- California Energy Commission — Supporting California's 2+ GW automated demand response capacity through grants and incentives.
Examples
Empire State Building Deep Retrofit: Comprehensive energy retrofit including windows, lighting, HVAC, and controls. Results: 38% energy reduction, $4.4 million annual savings, 8-year payback including revenue from sustainability brand value. Verified through IPMVP Option C whole-building approach.
California Flex Alert Program: Statewide demand response during grid emergencies. 2024 performance: 4-5 GW peak reduction during August heat wave, avoiding rolling blackouts. Participation: 3+ million residential customers responding to mobile alerts. Cost: approximately $15/kW-year.
Walmart Energy Management: Portfolio-wide efficiency program across 5,000+ US stores. Results: 30% energy intensity reduction since 2015, $1 billion cumulative savings. Approach: LED lighting (100% conversion), advanced HVAC controls, renewable energy integration. M&V through automated building analytics.
Action Checklist
- Benchmark current EUI against peer buildings and establish improvement targets
- Audit major energy end uses to prioritize efficiency investments
- Calculate cost of saved energy for proposed measures against utility rates
- Assess load flexibility potential for demand response participation
- Implement automated controls enabling grid-responsive operation
- Evaluate utility programs and enroll in applicable rebates and DR programs
- Establish M&V framework for ongoing savings verification
- Consider grid carbon signals for load-shifting optimization
FAQ
Q: How do I prioritize between efficiency and demand response investments? A: Efficiency first—reducing total consumption lowers both costs and emissions. Then optimize timing of remaining consumption through demand response. However, if grid flexibility payments are high (>$100/kW-year), DR investments may have faster payback. Model both together for portfolio optimization.
Q: What's the business case for automated demand response? A: Automated DR provides: (1) utility/ISO payments ($30-150/kW-year); (2) demand charge reduction (10-30% of demand costs); (3) time-of-use bill optimization (5-15% electricity cost reduction); and (4) carbon reduction from load shifting. Combined value often $100-300/kW-year for highly flexible loads.
Q: How reliable are deemed savings versus measured savings? A: Deemed savings (based on measure counts and engineering estimates) typically overstate actual savings by 15-30% for complex measures. Measured savings (Option C/D M&V) are accurate to ±5-15% but cost more. For single measures in stable conditions, deemed savings are reasonable; for comprehensive retrofits, measured approaches are essential.
Q: How do I address split incentives in leased buildings? A: Options include: (1) green lease clauses sharing savings between owner and tenant; (2) on-bill financing where utility recovers costs through bills; (3) PACE financing attached to property, not tenant; (4) operating expense caps that give owners incentive to reduce base-year costs. No single solution works everywhere.
Sources
- International Energy Agency (IEA), "Energy Efficiency 2024: Market Report," November 2024
- McKinsey & Company, "Net-Zero Building Sector Transition," September 2024
- ACEEE, "State Energy Efficiency Scorecard 2024," October 2024
- Lawrence Berkeley National Laboratory, "Cost of Saved Energy Database," 2024
- DOE, "Grid-Interactive Efficient Buildings Technical Report Series," 2024
- Empire State Building, "Sustainability Case Study Update," 2024
- California ISO, "2024 Summer Market Performance Report," October 2024
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