Megawatts vs. Negawatts for GHG reduction?

Does added renewable generation capability give you the best bang for the buck for reducing GHG emissions? How does reducing power needs by improving efficiency stack up? Amory Lovins of Rocky Mountain Institute coined the term "negawatts" back in the early days of the energy efficiency movement. This concept compares the cost of a watt gained by the system through improved efficiency, vs. the cost of a watt gained by the system through new generation. In GHG terms, one watt not used reduces overall GHG emissions as much as one additional watt generated by a non-fossil fuel powered generator. Here is a worked example that demonstrates this concept:

If you put in a 3kW PV system on your home, that will cost you about $20,000, after rebates. If you finance that at 5% over 30 years, which is the life of the system, that will end up costing you about $39K. That system will generate about 4600 kWh/yr in Sonoma County, CA, which is about 1.6 tons of CO2 avoided. Over the 30 yr period, that is about 48 tons of CO2 avoided. That is about $800/ton of CO2 avoided.

Now take a 20 watt compact fluorescent bulb, replacing a 100 watt incandescent. Let's assume the lifetimes of the two bulbs are equal, 10,000 hours (they're not, but it doesn't really matter in this case). Let's say the compact fluorescent costs $10, and the incandescent costs nothing. Over the lifetime of the two bulbs, the compact fluorescent avoids 800kWh, which is about 560 lbs of CO2, at a cost of $10. This works out to about $35/ton of CO2 avoided.

Here is a good resource for energy efficiency information: www.aceee.org