Energy Savings Certificate Markets: Opportunities and Implementation Barriers

Early experiences with energy savings certificates (ESCs) have revealed their merits and the challenges associated with them. While in the United States ESC markets have yet to gain significant traction, lessons can be drawn from early experiences in the states of Connecticut and New York, as well as from established markets in Italy, France, and elsewhere. The staying power of European examplesdemonstrates that ESCs can help initiate more efficiency projects. This article compares ESCs with renewable energy certificates (RECs), looks at the unique opportunities and challenges they present, and reviews solutions and best practices demonstrated by early ESC markets. Three major potential ESC market types are also reviewed: compliance, voluntary, and carbon. Additionally, factors thatwill benefit ESC markets in the United States are examined: new state EEPS policies, public interest in tools to mitigate climate change, and the growing interest in a voluntary market for ESCs.