The power of efficiency: you may not notice it, yet it's the nation's most abundant energy resource.

• Author: Andersen, Glen
• Position: ENERGY

It lacks the visual appeal of a shiny new array of solar panels, a natural gas plant or wind farm. Yet "energy efficiency" is the country's most reliable, least expensive and cleanest energy resource. And it can be found in abundance in all 50 states.

Energy efficiency describes the technologies, materials and practices that use less energy, providing the same benefits at less than half the cost of generating more energy. It increases energy security, promotes local economic development and lowers energy costs for consumers and business. Efficiency creates no emissions and reduces the number of power plants and power lines that need to be sited and built.

With all these advantages, why is it so seldom fully embraced?

"Energy efficiency is largely invisible, and its benefits can be challenging to convey," says Senator Marc Pacheco (D) of Massachusetts, who promoted legislation making his state a national leader in efficiency.

Pacheco adds that many people confuse efficiency with conservation and "simply don't under stand it doesn't require them to change their energy consumption habits at all."

Energy efficiency and conservation both help reduce energy consumption, but in very different ways. Wearing a sweater and turning down the heat, or raising the temperature of an air-conditioned house from 76 to 80 degrees in the summer, is conservation. Installing an efficient furnace or air conditioner and increasing building insulation is energy efficiency. A modern efficient refrigerator, for example, uses one-fourth as much energy as the average mid-'70s refrigerator, while providing more space, better temperature control, cold water and crushed ice.

Energy efficiency cannot be seen, but its results can. Massachusetts saved 610 gigawatthours in 2010 after the legislature passed a law in 2008 requiring state utilities to boost energy efficiency. That's equal to the annual energy used by nearly 85,000 households. The economic results are just as dramatic. Efficiency investments made from 2010 through 2012 are projected to save $6 billion in energy costs, according to the Energy Efficiency Advisory Council, which helps administer the effort.

Although energy efficiency has broad support among utilities and policymakers, some think there should be stricter efficiency standards for utilities, while others feel the market is operating effectively and merely needs coaxing. Texas Senator John Carona (R) authored an energy efficiency law that changed the regulatory structure to eliminate regulations that discouraged competition.

"I do think the market was using cost-effective energy efficiency methods under the mechanisms previously available to them," he says. "My bill is meant to broaden market opportunities in areas that were previously not as competitive or consumer friendly."

Energizing the Economy

Investments in efficiency can be attractive, particularly in a tough economy. Utilities save money because they don't have to build new plants, for example, and consumers save because they use less energy. By freeing up capital, efficiency...