A Framework for Evaluating the Cost-Effectiveness of Demand Response

Lawrence Berkeley National Lab
Completed February 2013

Synapse, along with the Regulatory Assistance Project, managed a working group of experts from different perspectives from around the U.S. to recommend a common framework for evaluating the cost-effectiveness of demand response resources.  The report finds that the framework typically used to evaluate energy efficiency—with five tests addressing different perspectives—is most commonly used for evaluating demand response resources.  The report then describes how some of the costs and benefits of demand response resources are different from those of energy efficiency resources, and thus require different evaluation techniques. This is particularly true for estimating avoided capacity costs.