You’ve heard of the megawatt – now get ready for the “negawatt.”

As the name suggests, negawatts are a unit of measurement relating to energy efficiency. The higher the savings through either a program or a product, the more negawatts that are hypothetically generated. Every time you make efficiency improvements on your home or avoid turning on a light switch, you are, in a sense, your very own negawatt power plant.

Though this may all seem a bit silly, the meteoric rise of the negawatt carries with it several important factors still missing from residential and commercial sector efficiency measures, saving families and businesses money and helping them make informed decisions about energy-related investments.

Finding common ground

As we’ve discussed before, efficiency can be a rather elusive concept. Sure, it essentially boils down to energy savings, but so many different environmental factors play into efficiency. It’s difficult–perhaps even impossible–to consider all the variables in play.

Though there’s still much work to be done, negawatts lay the groundwork for a system through which families and companies can compare processes and products while seeking to improve their efficiency. Instead of doing the math themselves or wasting money on a trial-and-error approach, these people can assess the effectiveness of their efficiency initiatives by weighing their current negawatt production versus other plans.

Energy might start at the power plant, but end-users wield a lot of control over the industry at large.

Energy might start at the power plant, but end-users wield a lot of control over the industry at large.


Customer-facing efficiency

When we talk about negawatts, what we’re really discussing is end-use efficiency, or any power saving tips applied by the last-most user. Power plants can increase efficiency with up-to-the-second demand data, smarter infrastructure can maximize throughput during the transmission process, but ultimately, the end-users decide whether to charge their cell phones with the power once it arrives on their doorsteps.

While that may seem like end-users are the bottom rung of the totem pole, they’re actually top banana. According to the Center for Climate and Energy Solutions, end-user negawatt production actually dictates the industry, with more attention paid to customers day after day. All energy interests rely heavily on the consumption habits of their consumers. After all, decreases in end-use means generators don’t have to spend as much money expending resources for unneeded demand and transmission authorities don’t have to overwork their regional grids with higher-than-necessary capacity.

Energy customers – especially those in deregulated energy states – hold much a lot of sway. To that effect, every negawatt these people produce reshapes the energy industry.

Consumption as commodity

Over the next few decades, the national grid will go through a complete makeover. Be it dilapidated hardware or the incorporation of distributed energy resources like solar or wind power, the country’s energy infrastructure requires fine-tuning if it expects to serve hundreds of millions of end-users all day everyday without interruption.

But any electricity customer knows outages happen, usually the result of mechanical failure from extreme weather conditions. While Grid 2.0 will gain resilience against storms, some energy suppliers are turning toward experimental methods of limiting customer downtime, namely demand response. If a part of the grid is impaired, a grid operator or even a supplier could reach out to customers and ask to divert a portion of their load to where it could be used to help keep families and businesses out of the dark. A report by the United States Association of Energy Economics found that as little as a 10 percent demand response dedication could save each energy customer as much as $30 a year on energy costs. This measure also greatly reduces the economic impact of power loss and allows for a smoother transmission into investing in expensive, large-scale grid modifications.

What does this relate to negawatts? Demand response establishes a market for energy efficiency.  If your home or business is efficient enough, suppliers can, with your permission, reduce your consumption without any noticeable impact. In the years to come, homes and businesses could not just save money through conservation, but also receive competitive payments from energy suppliers for their negawatts while also helping a community in need.