Clean Electricity
Electrification
Low-Carbon Fuels
Resilience
Icon of a gear gear with an upward trending arrow, representing growth or progress.

Energy Efficiency

Advance energy efficiency across buildings, industry, and transportation sectors, including by expanding access to and appeal of multimodal transportation options, to deliver the benefits of a more efficient energy system.

Energy efficiency must be the starting point for how Oregon addresses the energy transition. Energy efficiency means getting the same level of service (heating, cooling, comfort) using less energy. The less energy we use, the less we need to produce and deliver. This saves households and businesses money, promotes reliability, and reduces the costs of the energy transition economy wide.

There are many other reasons to support energy efficiency:

  • It can avoid the need for more energy infrastructure, relieving pressure on our natural and working lands, waters, and ecosystems.

  • It can improve health and create jobs.

Energy efficiency has traditionally focused on improving the performance of buildings and appliances, often treating transportation policy as a separate domain. But to meet economy-wide decarbonization goals, we need to broaden our understanding of energy efficiency. Reducing vehicle miles traveled cuts energy use by reducing the length of car trips and shifting travel to more energy efficient modes where feasible. In this way, VMT reduction and supportive land use are powerful forms of energy efficiency – delivering the same or better access and mobility with less total energy consumption.

Supporting compact, connected communities can further advance energy efficiency in transportation and buildings, improve public health through more active transportation such as walking, biking, and rolling, and reduce energy burden through decreased energy costs.

In the energy strategy Reference Scenario, energy efficiency, including from electrification, brought Oregon’s overall energy demand in 2050 down to 22 percent below 2024 levels. In households, energy efficiency can reduce energy bills and energy burden, while in businesses it can reduce operating costs, making them more competitive. At the same time, the upfront investment in more energy efficient technology may pose a barrier for some households and businesses, requiring additional support, such as incentives, to realize savings. Affordability is an important consideration — one that must be explicitly mitigated — in energy efficiency adoption to ensure low-income and environmental justice communities are able to participate in technology upgrades.

Energy Efficiency Policies

Each policy has a short-hand reference shown in italics used throughout the strategy.

1a

Deliver energy efficiency and conservation improvements in existing and new residential and small commercial buildings to align with state decarbonization goals. Prioritize programs to serve low- and moderate- income and energy burdened households. (Buildings efficiency)

  • Reducing energy consumption in residential and commercial buildings is key to meeting Oregon’s climate goals and minimizing costs.

    In 2022, existing commercial and residential buildings were responsible for:

    • More than 36 percent of the total energy consumed in Oregon

    • 34 percent of Oregon’s greenhouse gas emissions

    • Over 36 percent of Oregon energy expenditures.

    These energy expenditures are a significant burden, with many Oregon households having to spend more than 10 percent of their total income on home energy consumption.

    As Oregon constructs new buildings to address the housing crisis and meet housing demand over time, it will be essential to capture all efficiency opportunities, including in building envelope (roof, walls, windows, etc.) and through efficient electric heating and cooling technologies.

    Smaller units in compact developments are an efficient type of housing, and land use policies should ensure that these are an option for Oregonians. Programs should be designed to deliver equitable access to clean technologies and measures for environmental justice and energy burdened communities, recognizing that they often deliver multiple benefits including clean energy, resilience, health, affordability, and others.

  • Oregon is a national leader in residential and commercial energy efficiency, but more work is needed to overcome upfront cost barriers, expand access to information, ensure a sufficient supply of skilled labor, and help all Oregonians lower their energy bills. Energy efficiency measures in buildings include weatherization, lighting, more efficient appliances, and passive technologies like shading and cool roofs. Oregon must continue to advance building energy codes to support lower-carbon new buildings, and continue measures to decarbonize existing small commercial and residential buildings.

    It is also important that when appliances or equipment break, they are replaced with high-efficiency models. This means building on existing programs and standards, including ratepayer-funded programs in utility service areas across the state and state-funded programs like the Healthy Homes Grant Program and ODOE’s heat pump incentive programs. This also means working with Tribal governments in delivering energy efficiency improvements for Tribal members, as well as building out the network of community-based organizations to support energy efficiency in low- and moderate- income and energy burdened households.

    Finally, energy efficiency policy should prioritize electrification and shifting electricity use to off-peak times and hours of high renewable capacity to ensure alignment with a least-cost, economy-wide pathway to decarbonization.‍ ‍

  • Delivering energy efficiency improvements relies on actions of thousands of Oregon households and businesses.

    • Widespread adoption of energy efficient technologies requires understanding and overcoming the various and unique challenges that Tribes, homeowners, renters, landlords, and businesses face.

    • One key barrier is that higher upfront investment may be needed to lower monthly bills in the long term.

      • Small businesses may require support to make upfront investments in energy efficient technologies.

      • Energy burdened households who would most benefit from permanent bill reductions are at highest risk of being excluded from opportunities to weatherize their home or install the most energy efficient technology because of the high upfront cost.

      • Without access to grants or financing, the most efficient technology is less accessible, and buildings may require other repairs before energy efficiency measures can be implemented.

      • Renters have limited opportunities to implement investments in the homes they occupy and may face higher rent when improvements are made.

      • The loss of federal funding and policies supporting energy efficiency risk slowing progress on energy efficiency at a time that acceleration is needed. This can exacerbate energy burden, hinder one of the fastest ways to relieve load growth, and create uncertainty for businesses and workers engaged in providing energy efficiency services. It also reinforces the importance of ratepayer-funded energy efficiency programs across Oregon’s utility service areas.

1b

Evaluate, promote, and allocate funding to improve energy efficiency in large commercial and industrial sectors. (Large commercial and industrial efficiency)

  • Oregon’s large commercial and industrial entities are a crucial contributor to jobs and activity in the state’s economy. These entities account for:

    • 27 percent of total energy consumed in Oregon

    • About 34 percent of greenhouse gas emissions

    • Almost 29 percent of energy expenditures in our state.

    Energy efficiency can reduce energy waste and help businesses reduce their energy costs, improving the competitiveness of Oregon’s industries while advancing our climate objectives.

    This may include custom measures unique to industries or collaborative process design such as industrial symbiosis that serve to optimize the use of energy by reducing waste and sharing resources through co-location of processes across businesses.

    Energy efficiency may also reduce emissions from local pollutants, particularly when combined with process or material efficiency, thereby reducing harm to both communities and nature, as well as ensuring that environmental burdens and benefits are distributed equitably without disproportionately affecting marginalized groups.

  • Oregon has policies and programs in place to encourage energy efficiency improvements in large commercial and industrial sectors:

    • The Climate Protection Program sets decarbonization objectives for fuel suppliers and will set emissions goals requirements for energy-intensive, trade-exposed industries by 2027.

    • The Large Electric Consumer Public Purpose Program allows some of Oregon’s largest electricity users in Portland General Electric and Pacific Power service areas to invest a portion of their public purpose charge on self-directed energy conservation and renewable projects on their sites.

    • The Building Performance Standard is an important mechanism to drive energy efficiency in large commercial buildings.

    Industries will continue to need support to identify and access low-carbon solutions for their businesses to comply with these goals.

    Energy efficiency improvements in commercial and industrial sectors often need to be tailored to the specific function, technologies, and processes of a facility. In addition to the policies and programs listed above, identifying and implementing energy efficiency measures may require additional technical expertise, evaluation of savings opportunities, and tailor-made solutions.

    It is also essential that energy efficiency measures consider electric and hybrid electric technologies wherever possible and save costly low-carbon fuels for the hardest-to-electrify applications. State policies and regulatory targets can set industry expectations and establish a runway for the adoption of new technologies so businesses know what is coming and can plan for it.

    • Large commercial and industrial energy users have much larger energy loads and use a broader range of processes and technologies than households and small businesses. For example, a data center, food processing facility, and cement manufacturer will all require very different expertise and solutions to improve energy efficiency.

    • Businesses must overcome various challenges, including information barriers, technical challenges, and high capital costs.

    • Investment in new energy efficient equipment often has a higher upfront cost. All businesses face financial pressure, and investments in efficiency measures need to result in operating cost savings to pay back the investments within a reasonable time frame to be considered.

    • Investment in nascent technologies or fuels may involve taking on new risks and may temporarily disrupt a manufacturing process or change it.

    • Improvements in industrial efficiency may result in job displacement as some processes are automated or require different skills and training. This has the potential to lead to greater social inequity as some communities may not have access to the training and experience needed to adjust to the new equipment or process.

1c

Prioritize policies and increase support for programs that expand access to multimodal transportation options – including public transit, biking, and walking infrastructure – and promote development patterns that make it easier and more appealing for people to live, work, and access services without relying on a personal vehicle. (Expand access to and appeal of multimodal transportation options)

  • Reducing the overall amount of driving, particularly in urban areas, is critical to achieving Oregon’s clean energy goals at the lowest possible cost while maximizing potential benefits.

    • The transportation sector is the state’s largest source of greenhouse gas emissions, accounting for 35 percent of total emissions in 2023.

    • That same year, Oregonians spent $11.2 billion on transportation fuels – more than half of all energy expenditures in the state and more than all other forms of energy combined.

    The energy strategy modeling finds that reducing per-capita vehicle miles traveled in light-duty vehicles represents a critical least-cost measure to reduce greenhouse gas emissions. A modeled failure to achieve Oregon’s VMT reduction targets proved to be the second costliest among all pathways analyzed. Expanding access to a variety of transportation options (often referred to as multimodal options), including through increased transit service and closing critical gaps in local bicycle and pedestrian networks, reduces pressure on the energy system, cuts air pollution, improves public health, and offers more reliable, affordable mobility – reducing dependence on personal vehicles and saving people money.

  • ‍Oregon has long been a national leader in land use and transportation planning, effectively managing urban growth and expanding mobility options, while preserving rural lands. However, achieving the state’s goal for a 20 percent reduction in light-duty VMT per capita by 2050 will require greater investment and a stronger prioritization of multimodal transportation infrastructure.

    ‍Reducing reliance on single-occupancy vehicle trips requires a rethinking of how we fund, design, and build our transportation, housing, and land use systems. Stable, climate-aligned funding is essential to expand diverse, low-carbon mobility options and to create neighborhoods where walking, biking, and transit are safe, convenient, and desirable. To get there, state agencies must work closely with planners, developers, tribal transit programs, and local governments to support denser, transit- friendly development in urban and suburban areas and make it easier to access jobs, essential services, and recreation without relying on long car trips. Oregon already has several strong policies and programs designed to support these goals – including Climate Friendly and Equitable Communities, Safe Routes to School, Great Streets, and the Statewide Transportation Improvement Fund – but funding and resources for implementation remain insufficient to meet the scale of current needs. ‍

    Oregon must also work with rural communities to understand their unique transportation needs and identify opportunities to expand access to transportation options, recognizing that rural Oregonians often drive longer distances and live farther apart than those in urban areas, especially outside town centers. By centering people and climate in transportation investments, Oregon can strengthen community well-being while driving down emissions.

    • Identifying funding for programs that expand access to multimodal transportation options in Oregon is challenging, in part due to a historic imbalance in transportation spending that has long prioritized highways and car-centric infrastructure. This legacy makes it politically difficult to reallocate resources toward modes that some still view as secondary or less traditional.

    • Constitutional restrictions on how fuel tax revenues are used further constrain available funding sources.

    • Additionally, multimodal projects often require complex coordination across agencies and jurisdictions and can face community resistance if not well-aligned with local needs or priorities. It will be important to engage trusted community organizations – ensuring they are appropriately compensated for their time and expertise – to conduct outreach, provide informational opportunities, and provide a venue for projects to adapt and improve in support of community needs. This collaboration will help ensure that community needs and priorities are understood and effectively integrated into program objectives. For example, rural communities face distinct transportation challenges, including greater distances between destinations and operational requirements that can make traditional public transportation less feasible.

    • Safety concerns also present a barrier, both in terms of the need for well-designed, protected infrastructure for walking and biking, and ensuring personal security and comfort for riders on public transportation – especially for women, youth, seniors, and historically and currently marginalized populations.