Gross is gross and net is net: simple, right?

Abstract

The identification of the correct baseline is essential for accurately estimating the gross impacts of any measure. For example, for early replacement, the appropriate baseline is the energy use of the old equipment that was replaced. For replacement on burnout (ROB) or an addition, there are various baselines that could be used including applicable local, state and federal energy codes and standards (code and standards or C&S) with a compliance adjustment as necessary and the market average, current practice, or industry standard practice (hereafter referred to as current practice) to represent the energy use of equipment purchased on average by consumers in the market. Once gross impacts are estimated, the next step typically is to determine what portion of the gross impacts is caused by the program. In many cases, this is done by estimating a net-to-gross ratio (NTGR) and multiplying it by the gross impacts to yield net impacts. However, some evaluators are now arguing that using current practice as the baseline for estimating gross impacts and then adjusting these savings using a NTGR is a mistake since the gross savings are in many ways closer to net than gross. While the authors agree that to refer to the difference between annual energy use associated with current practice and that of the rebated measure is not purely net savings, they disagree about which solutions to recommend. They note that what counts as credible evidence in a given jurisdiction may help to decide which way to proceed.