(A version of this blog post was originally printed on the Smart Grid Library website in March 2015)

Energy efficiency (EE) benefits are well-known. States like California have used aggressive EE policies and standards impacting appliances to building envelopes, and it’s been a successful strategy to reduce per capita energy consumption. But EE itself is overdue for significant upgrades to become what is christened as EE 2.0. Progress has stalled because of challenges like split incentives and other policy and finance issues. Compare an EE investment in insulation upgrades to an investment in solar panels. Both have upfront acquisition costs with a promise of future energy bill reductions. Homeowners have a range of options that include PACE programs to finance solar investments or can partner with firms that handle the upfront acquisition and installation costs and share in the production and tax benefits. Insulation upgrades lack the same diversity of financial programs and partnership options.

Other problems relate to the opacity of building performance in terms of its energy and water use. Innovations in policy and in the financial instruments that can help building owners easily identify benefits to their bottom lines will help accelerate energy-saving transformations.

There’s new momentum and focus on defining and facilitating EE 2.0. California is now turning its attention to delivering a 50% increase in energy efficiency in existing buildings by 2030. The California Public Utilities Commission recently released a draft document on energy efficiency titled California’s Existing Buildings Energy Efficiency Action Plan. This roadmap focuses on market forces to transform today’s residential, commercial, and public buildings into energy efficient buildings.

To do that, there’s a need for relevant data. There’s a lack of transparency about building performance. Starting with benchmarking, a methodical development of performance data will provide new inputs for decisions regarding EE investments. This transparency also serves to promote awareness of the value of EE programs to all stakeholders.

More building performance data has another benefit. The barriers to technology advances in materials sciences will be reduced because innovators and their funders will increasingly have credible cost justifications for the addressable markets for their solutions. For instance, new research in energy harvesting can benefit from EE 2.0. Solar, piezoelectric (kinetic forms like vibration), and thermal energy are three areas with some commercial maturity. But electromagnetic waves can be harvested too. There’s no shortage of ambient wireless or radio frequency (RF) activity around those of us living in developed economies. Interesting research includes both near-field and far-field applications that harvest TV, cellular, and Wi-Fi signals. The implications of these research activities are widespread. Not only can electronic components become more energy self-sufficient by harvesting energy, but building envelope materials like exterior coatings and windows may harvest energy too.

Expect to see real breakthroughs that overcome today’s energy efficiency technology, policy, and finance challenges in the next few years. It’s an interesting time to consider how you can take advantage of these trends. Contact us to learn more about how we can deliver strategic guidance about EE 2.0 and what it means for your company.

Christine Hertzog is a consultant, author and professional explainer focused on smart grid technologies and solutions. She provides strategic advisory services to startups and established companies that include corporate, market and funding development.