Energy Efficiency is Infrastructure

Editorial note: I am pleased and honored to welcome Paula R. Glover, president of the Alliance to Save Energy, for E/lectrify’s first and very timely guest op-ed piece. Energy affordability is the hot topic of the moment, and no one unpacks it better than Glover. Energy efficiency must be treated as our essential first fuel; it cuts consumer electric bills, provides grid flexibility and should be deployed at speed and scale.

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It’s time to be direct about the moment we are facing as the electric power grid comes under growing stress, and an already serious affordability crisis worsens.

We don’t have the luxury to pick one solution to growing demand and rising costs and hope it will be enough. We need every tool and technology available, deployed at scale.

For more than a decade, the U.S. economy has grown while total energy use barely moved (see below), not because people sat in the dark, but because we became more efficient. Lighting that once used 60 watts now uses eight. Buildings run on smarter controls. Industrial energy waste is way down. We get more power from the same energy.

U.S. energy intensity ─ total energy consumption divided by real gross domestic product ─ has consistently declined, dropping by over 50% since 1980, reflecting improved efficiency and economic shifts.

That’s great news, but here’s a truth that often gets lost in the bigger picture: For many low-income households, energy has never been affordable. Energy insecurity has been chronic for decades.

Nearly one in four U.S. households can’t afford their energy bills ─ a figure the National Energy Assistance Directors Association documented in 2024. Today’s numbers could be worse.

One in three households, according to the Census Bureau’s Household Pulse Survey, reported cutting back on food or medicine to pay a utility bill that same year.

Average monthly residential electricity costs have surged 34% since 2020, reaching $189 a month in 2025 ─ the highest annual average ever measured, according to a recent report by JD Power.

Federal programs such as the Low-Income Heating and Energy Assistance Program and Weatherization Assistance Program have been severely underutilized as costs continue to rise. LIHEAP helps low-income households manage and pay their home heating and cooling bills, but reaches only 20% of those who qualify.

Similarly, WAP pays for efficiency upgrades to reduce energy costs for low-income households, but those funds go to about  32,000 homes a year in a country of 140 million housing units. The program saves individual households $372 or more every year.

Ensuring low-income households are energy efficient and can pay their electric bills should not be a partisan issue. Both programs have been hugely successful but are woefully underfunded ─ which is not a recipe for affordability for those who need it most.

What has changed now is more middle‑income families and small businesses are feeling the pain. When affordability reaches the middle class, the problem isn’t on the margins; it’s finally impossible to ignore.

That is why it is essential that these programs ─ and energy efficiency itself ─ be treated as infrastructure. Efficiency is the cheapest and fastest way to take pressure off the grid, and it should be the first “fuel” to consider when facing costly grid upgrades.

Weatherization, insulation, air sealing and efficient heating and cooling should be the baseline of any affordability strategy. If a home is leaking heating and cooling through walls, attics, windows and ducts that were never sealed, no rate reform or infrastructure build-out will make that home affordable.

Whole‑home retrofits and multifamily upgrades deliver lasting relief: lower bills every month, better comfort and health and, importantly from a system perspective, lower energy consumption during periods of highest demand on the grid. Efficiency gains are what kept demand growth manageable for the past decade; without them, today’s price pressures would be considerably worse.

But efficiency alone isn’t enough. Growth in electric power demand is real ─ from data centers, electrification, manufacturing and new housing.

We need flexibility to manage the growth from this new demand ─ “large loads” in industry-speak. One approach, developed by the Alliance to Save Energy, calls on the high-tech giants building hyperscale data centers to help fund efficiency and demand management initiatives on local grids as a way to open up the electricity capacity they need to get online faster. This concept is called Bring Your Own Distributed Capacity.

(“Demand management” and “demand response” are industry terms for initiatives under which utility customers receive some form of payment to briefly reduce or turn off their power to relieve stress on the grid.)

A recent report from the Alliance and the Ad Hoc Group, funded by Google, illustrates how large-scale energy users can collaborate with utilities and everyday consumers to cut energy use and costs. The report cited a Brattle Group study showing that a portfolio of demand response and energy efficiency measures could meet up to 18% of a representative utility's 2030 seasonal peak load.

One example, virtual power plants – combining solar, storage and efficiency technologies -- let utilities prompt customers to reduce or shift their electric use where and when the grid is under the most stress.

Twenty seven states and Puerto Rico have pilot programs that test or deploy these combinations of technologies. Texas’ Aggregated Distributed Energy Resource program allows generation like solar and storage and demand response resources such as water heaters, thermostats and EV chargers to be aggregated and participate in wholesale power markets. So far, two VPPs have completed testing and are qualified to participate.

California delivered 535 megawatts of power aggregated from 100,000 homes in a VPP pilot test last summer.

Rewiring America’s report Homegrown Energy found that household upgrades like heat pumps, rooftop solar and batteries could collectively conserve and shift enough power to meet 100% of the projected electricity demand growth from data centers (see map below). If hyperscalers pay for a portion of the upfront cost of these residential upgrades, they could secure grid capacity at a cost comparable to building new fossil-fuel generation, the report says.

Design matters inside the data center too. Modern facilities can be built for dramatically higher efficiency, for example, by optimizing cooling, consolidating underused equipment and implementing artificial intelligence-driven power management.

At the grid level, AI‑enabled planning tools ─ such as predictive maintenance and capacity optimization  ─ maximize efficient use of available energy. Every avoided substation is a cost that never lands on a bill.

States are stepping up too, with updated codes, stronger efficiency standards and new financing programs. Virginia, Kansas, Minnesota and Nevada have adopted policies directly linking large‑load interconnection to demand‑side investment.

When state and federal policies and incentives align, the impact multiplies. When they don’t, system reliability and affordability can be at risk. Right now, policy durability is a problem ─ programs that reset after every election can’t attract investment or build a workforce, and the customers who need help the most are left waiting.

All of this is happening against a backdrop of public pressure. We are at a turning point, not approaching one. Prices are rising, communities are protesting data centers and energy costs have become a defining issue in state-level elections, as well as the coming midterms.

Public trust is strained, and that is a mandate to deliver real affordability, rather than talking points.

The grid is more stressed, the affordability burden is heavier and the growth is happening faster than anything anyone had  planned for. We can’t build our way out; we must innovate, flex and design our way out ─ by using less energy to meet the same needs, by using it more intelligently and by giving people the knowledge and means to control their costs.

We aren’t saying don’t build, but we must use all available tools and technologies to build smarter and more efficiently.

Paula R. Glover is president of the Alliance to Save Energy