10 Energy Efficiency Benefits and Importance Explained

The importance of energy efficiency is its relevance to achieving social, environmental, and economic sustainability. Energy efficiency benefits are environmental protection, energy conservation, low cost, high productivity, job creation and high ROI. 

his article extensively discusses the importance of energy efficiency, based on a number of unique benefits. The contents of the article are outlined below; 

-Why is Energy Efficiency Important?

-Environmental Importance of Energy Efficiency: Why is Energy Efficiency Important to the Environment?

-Economic Importance of Energy Efficiency: Why is Energy Efficiency Important to the Economy?

-Social Importance of Energy Efficiency: Why is Energy Efficiency Important to the Society?




Why is Energy Efficiency Important?

Energy efficiency is important because it conserves natural resources, resulting in environmental, economic, and social sustainability.

As the foregoing sentence implies, energy efficiency can be defined on the basis of its relevance to the achievement of sustainable development.

Environmentally, energy efficiency can reduce the rate of fossil fuel exploration and combustion, as well as deforestation, pollution, greenhouse gas emission, global warming, and climate change. These are all very crucial issues that affect the environment.

The economy is also impacted by energy efficiency. This is because, when energy consumption is minimized (which is one of the goals of energy efficiency), the cost of energy will most likely be reduced as well. In addition to lowering individual utility bills [7], energy efficiency minimizes energy-price fluctuations, and creates jobs. 

Because energy cost is linked to food insecurity, poverty, and other social problems [2], energy efficiency is a potential means of addressing such problems. Similarly, several of the health risks and potential hazards which are posed by energy-generation, can be made less-prevalent through energy efficiency.

 The main areas of importance (and the individual benefits) of energy efficiency, are discussed in the following subsections;


-Environmental Importance of Energy Efficiency: Why is Energy Efficiency Important to the Environment?

Energy efficiency is important to the environment because it conserves natural resources and minimizes the rate of air, soil, and water pollution.

The environmental benefits of energy efficiency are as follows;

1). Reduced Carbon Footprint as an Importance of Energy Efficiency

‘Carbon Footprint’ is simply a measure of the amount of greenhouse gases released into the atmosphere, (directly or indirectly) as a result of human activity, in units of tons of carbon dioxide equivalent (CO2e).

It is estimated that the use of energy-efficient methods and technologies, can eliminate up to 550 million metric tons of greenhouse emissions per annum, by the year 2050 [4].

The positive impact of energy efficiency is likely to be most prevalent and evident in the residential (building) sector. This is because the residential sector accounts for about 20% of greenhouse gas emissions [5], as well as a significant proportion of energy consumption.

By setting-up energy-efficient buildings (based on architectural design, and internal energy systems/appliances), a reduction of the carbon footprint of the building sector, by 25-30% can be achieved.

2). Addressing the Global Warming/Climate Change Problem

Greenhouse gases like carbon dioxide and methane, have the ability to trap solar energy in the form of radiant heat from the Earth’s surface [1].

This heat, which would have otherwise escaped into space, would thereby remain close to the surface of the Earth. The result of this unnatural process is what we refer to as global warming.

Global warming presents a huge problem to the Earth and its inhabitants. Its effects range from the loss (and destruction) of habitats, to the outbreak of illnesses, and the degradation of the environment, alongside chronic resource-depletion and natural hazards.

The ultimate outcome of a lack of energy efficiency, is climate change, which embodies all the long-term effects of global warming on a large scale.

In the presence of energy-efficient methods and appliances, however, the threat of climate change and global warming is reduced significantly. This is because energy efficiency leads to less fossil fuel-dependence and greenhouse emission,

3). Energy Conservation and Reduced Resource-Depletion

Energy conservation is a similar concept, which encapsulates the energy efficiency objective. It involves efforts and measures to reduce the rate at which energy is consumed in all sectors of the society. This can be achieved through energy-efficient technologies and practices.

By conserving energy, we also conserve the natural resources (such as fossil fuels and biomass) which are used to produce energy.

A typical example of a natural resource which is conserved through the practice of energy efficiency, is fossil fuels. These non-renewable resources contribute to greenhouse gas emissions, pollution, and several other hazardous events. Energy efficiency ensures that the rate of consumption of fossil fuels is reduced, thereby reducing the rate at which these resources are depleted [10].

The relationship between energy efficiency and natural-resource conservation, can also be illustrated by water. While water conservation itself does not directly translate to improved energy efficiency; the possibility of achieving energy efficiency can be increased through water conservation, since the supply of potable water in municipalities requires large amounts of energy [12]. 

4). Reduced Rates of Deforestation and Desertification

Deforestation represents a form of resource-depletion, where the natural resource in question is plant biomass.

However, it is discussed separately here, due to the immense importance of deforestation in our society today.

Because plant biomass serves as a source of bioenergy (in the form of heat), as well as a raw material for producing biofuels, forests are heavily relied upon as an energy source.

Another reason behind the rapid rate of deforestation in the world today, is the need to build power plants. Because these plants typically occupy a large expanse of land, and must be situated away from residential areas, it is often necessary to clear a significant portion of the forest, to accommodate the plant and its operations.

Deforestation is itself a precursor to another devastating environment problem; which is that of desertification. Studies have shown that deforestation is a prominent cause of desertification, which occurs when land loses its fertility, moisture, organic content, and other components which are required for plant growth.

Energy efficiency, Deforestation, desertification
Energy Efficiency Reduces Deforestation and Desertification (Credit: Kingrani 2014 .CC BY-SA 4.0.)


Because deforestation exposes the soil (which was once covered with vegetation), to the harsh conditions of the weather, the soil thus exposed, becomes more susceptible to effects such as erosion and leaching, all of which strip the soil of its agricultural potential.


-Economic Importance of Energy Efficiency: Why is Energy Efficiency Important to the Economy?

Energy efficiency is important o the economy because it minimizes the problem of energy cost. 

There are several dimensions from which this may occur, and they are discussed in the following economic benefits of energy efficiency;

5). Job Creation as an Importance of Energy Efficiency

One of the direct consequences of an improved and resilient economy, is employment.

In addition to its environmental benefits, energy efficiency is also an avenue of job-creation. Energy efficiency is regarded as one of the fastest-growing, as well as the largest, subsection of the energy sector in the United States, with regards to employment opportunities.

The number of workers in energy efficiency in the United States is about 2.25 million [3], far outnumbering the workers in the entire fossil fuel industry. Energy efficiency jobs also cut across a broad range of fields, including construction, energy development, and automobile engineering. Annually, more than 100,000 energy efficiency jobs are also created in the United States alone.

6). Reduced Energy Cost

This is perhaps the most obvious and common economic benefit of energy efficiency.

There are two basic ways in which energy efficiency reduces the cost of energy. The first of these, is by reducing the amount of energy that is consumed. Energy efficiency suggests that work will remain optimal, whereas the amount of energy that is required to do work, will reduce.

In a scenario such as this, the utility cost of energy will naturally reduce as well. It is estimated that the use of energy-efficient appliances can reduce utility costs by up to 30 percent.

The mechanism by which this occurs can also be referred to as energy conservation, since the decrease in electricity cost is caused by a decrease in energy use.

The effect of using less energy (as a result of energy efficiency) on utility bills, can be seen in the United States, where there is a sharp disparity between the energy cost in states like Alabama and New York, due to differences in energy efficiency of buildings and infrastructure.

Regions with weatherized buildings and modern electrical infrastructure, are likely to encounter lower energy cost than regions where these factors are absent.

The second way in which energy efficiency can lower the cost of energy, is more elaborate and collective. When energy efficiency is practiced, the demand for energy will reduce [6]. This will invariably lower the cost of energy (and energy resources like fossil fuels), as there will be more energy available to meet the existing needs.

7). Property-Value Optimization

Due to the fact that these properties tend to incur lower energy costs, it is well-known that energy-efficient buildings are more valuable in the real-estate market, than their conventional counterparts [8].

What this implies, is that energy-efficient designs and equipment, increase the value of buildings. This is also the case for buildings which are equipped with renewable energy technologies.

8). Significant Return On Investment (ROI) as an Importance of Energy Efficiency

Investing in energy-efficient technologies, leads to incremental returns in most cases [11].

The reason for this is the fact that energy efficiency minimizes future expenditure on energy. By upgrading to energy-efficient methods and technologies, it is possible to accumulate significant savings in energy cost, over time.


-Social Importance of Energy Efficiency: Why is Energy Efficiency Important to the Society?

Energy efficiency has positive potential-effects on the society. These are discussed as follows;

9). Improved Quality of Life as an Importance of Energy Efficiency

By reducing environmental pollution, climate change and global warming, energy efficiency also translates to an improved quality of life.

The burning of fossil fuels is related to health problems like asthma, lung cancer and heart failure [9]. Energy efficient technologies, generally help to cut down on the rate at which fossil fuels are burnt, thereby reducing the prevalence of such health problems.

Aside health problems, energy efficiency also encourages saving and economic buoyancy, by reducing the financial expense on energy. The areas in which energy efficiency impacts living standards, can be summarized into health, comfort and economic stability.

10). Reduced Fossil Fuel-Dependence

Another term which can be used to describe this benefit of energy efficiency, is “improved energy security”.

The society becomes more energy-secure when the source(s) of energy are not placed under any strain of high demand. This is likely to occur when energy-efficient measures and technologies are in place, because, under such circumstances; the demand for, and dependence upon, fossil fuels, is reduced.



The importance of energy efficiency, ultimately stems from its role in the global efforts to achieve sustainable development.

Energy efficiency has environmental, social and economic benefits.

Environmentally, the use of energy-efficient technologies and methods, prevents or minimizes challenges like global warming, air/water/soil pollution, and climate change, which are all related to the generation and consumption of energy.

Deforestation is another environmental problem which can be minimized by energy efficiency. This is because forests are a source of biomass fuel, which is often harvested in large quantities by felling trees, thereby leading to deforestation. In the process of building power plants, deforestation also often occurs, since these plants are generally situated on large expanses of land, in remote regions.

Deforestation itself is very often a precursor to desertification, meaning that energy efficiency can minimize the rate and prevalence of desertification on a global scale. 

Economic benefits of energy efficiency also exist. An obvious example of these is the reduction of energy cost, which is very likely to occur due to the fact that energy-efficient schemes result in energy conservation, thereby reducing the amount of energy consumed (and its cost).

Employment opportunities in the field of energy efficiency have become fairly common within the energy sector, with the existence of over 2 million jobs, and the creation of more than 100,000 employment opportunities per-annum, in the United States alone.

Other economic benefits of energy efficiency include optimization of property value, and incremental return on investment. These benefits mostly spring-up from the energy-conserving nature of energy-efficient technologies.

Social benefits of energy efficiency relate to the alleviation of potential humanitarian problems related to energy generation and consumption. These benefits include reduced prevalence of climate change-induced diseases, and poverty-rate reduction.



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