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Incentives/Policies for Energy Efficiency

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Energy Efficiency Portfolio Standard   

Last DSIRE Review: 08/14/2013
Program Overview:
State: Ohio
Incentive Type: Energy Efficiency Resource Standard
Eligible Efficiency Technologies: CHP/Cogeneration, Heat recovery, Custom/Others pending approval, Smart Grid
Eligible Renewable/Other Technologies: Other Distributed Generation Technologies
Applicable Sectors: Investor-Owned Utility, Retail Supplier
Electric Sales ReductionAnnual reductions leading to 22% cumulative reduction in retail electricity sales by the end 2025
Electric Peak Demand Reduction1% reduction in peak demand in 2009
0.75% reduction in peak demand each year through 2018
Web Site:
Authority 1:
Date Effective:
ORC 4928.66 et seq.
Authority 2:
Date Enacted:
Date Effective:
S.B. 315

In May 2008, Ohio enacted broad electric industry restructuring legislation (SB 221) containing energy efficiency requirements for investor-owned utilities. In addition to the efficiency standard, SB 221 established the Ohio Alternative Energy Portfolio Standard (AEPS), requiring utilities to obtain 12.5% of their energy for distribution from renewable resources by 2024, and an additional 12.5% of electricity from advanced resources by 2025.

Electric utilities are required to implement energy efficiency and peak demand reduction programs that result in a cumulative electricity savings of 22% by the end of 2025, with specific annual benchmarks. In addition, utilities must reduce peak demand by 1% in 2009, and 0.75% annually through 2018. In 2018, the legislature must make recommendations for future peak demand reduction targets.

Calendar Year Electric Sales Reduction Cumulative Electric Savings Annual Peak Demand Reduction Cumulative Peak Demand Reduction
2009 0.3% 0.3% 1% 1%
2010 0.5% 0.8% 0.75% 1.75%
2011 0.7% 1.5% 0.75% 2.50%
2012 0.8% 2.3% 0.75% 3.25%
2013 0.9% 3.2% 0.75% 4.00%
2014 1.0% 4.2% 0.75% 4.75%
2015 1.0% 5.2% 0.75% 5.50%
2016 1.0% 6.2% 0.75% 6.25%
2017 1.0% 7.2% 0.75% 7.00%
2018 1.0% 8.2% 0.75% 7.75%
2019 2.0% 10.2%    
2020 2.0% 12.2%    
2021 2.0% 14.2%    
2022 2.0% 16.2%    
2023 2.0% 18.2%    
2024 2.0% 20.2%    
2025 2.0% 22.0%    

The baseline for sales reductions are calculated based on the average number of total kilowatt-hours sold during the previous three years. For peak demand reductions, the baseline is calculated by the average peak demand during the previous three years. The Public Utilities Commission of Ohio (PUCO) may alter the baseline to account for new economic growth in a utility's territory or weather changes.

In order to meet the targets, utilities may implement demand-response or customer-sited programs, or transmission and distribution infrastructure improvements. In 2012, the legislature passed a bill that allows certain combined heat and power and waste energy recovery systems to qualify for the Energy Efficiency Portfolio Standard. Systems only qualify if they are installed or retrofitted on or after September 9, 2012. Certain waste energy recovery systems installed in 2002-2004 may also qualify. A system may qualify for either the Renewable Energy Resource portion of the AEPS or the Energy Efficiency Portfolio Standard. Savings from combined heat and power or waste energy recovery must be calculated by the PUCO. The amount of savings claimed from these two resources cannot exceed the annual percentage of the utility's industrial-customer load.

Failure to comply with energy efficiency or peak demand reduction requirements will result in PUCO assessing a forfeiture upon the utility, which will be credited to the Advanced Energy Fund. The amount of the forfeiture is either of the following:

  • An amount, per day per under-compliance or non-compliance, not greater than $10,000 per violation
  • An amount equal to the then existing market value of one renewable energy credit per megawatt hour of under-compliance or noncompliance

  Information PUCO
Public Utilities Commission of Ohio
180 East Broad Street
Columbus, OH 43215-3793
Phone: (800) 686-7826
Phone 2: (614) 466-3282
Fax: (614) 752-8351
Web Site:
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Disclaimer: The information presented on the DSIRE web site provides an unofficial overview of financial incentives and other policies. It does not constitute professional tax advice or other professional financial guidance, and it should not be used as the only source of information when making purchasing decisions, investment decisions or tax decisions, or when executing other binding agreements. Please refer to the individual contact provided below each summary to verify that a specific financial incentive or other policy applies to your project.

While the DSIRE staff strives to provide the best information possible, the DSIRE staff, the N.C. Solar Center, N.C. State University and the Interstate Renewable Energy Council, Inc. make no representations or warranties, either express or implied, concerning the accuracy, completeness, reliability or suitability of the information. The DSIRE staff, the N.C. Solar Center, N.C. State University and the Interstate Renewable Energy Council, Inc. disclaim all liability of any kind arising out of your use or misuse of the information contained or referenced on DSIRE Web pages.

Copyright 2013 - 2014 North Carolina State University, under NREL Subcontract No. XEU-0-99515-01. Permission granted only for personal or educational use, or for use by or on behalf of the U.S. government. North Carolina State University prohibits the unauthorized display, reproduction, sale, and/or distribution of all or portions of the content of the Database of State Incentives for Renewables and Efficiency (DSIRE) without prior, written consent.