Deconstructing the Rosenfeld curve: Making sense of California's low electricity intensity

Regulatory regimes that have increased household energy efficiency are of widespread interest to policymakers today. A prominent example is the state of California where electricity intensities in the residential sector have stayed near constant since the 1970s in sharp contrast to nationwide trends in the United States. A structural model of residential energy consumption is used to show that the use of energy intensities alone to evaluate the success of California efficiency programs is misleading and glosses over important policy independent factors. We quantify important effects of price, climate conditions and demographic characteristics on energy consumption in California. We also provide evidence of split incentive considerations in residential energy consumption patterns. We conclude that while state policy may have had some effect on efficiency, caution needs to be exercised in using the California example to inform expectations from similar measures in other regions.