Each cost-effectiveness study sets out to evaluate a specific set of energy conservation measures (i.e. home energy efficiency measures) for one or more specific building types (i.e. new single family homes). They start with a digital building model that reasonably represents a typical building of that type, for example, an average single family home in California.
Next, installation costs are typically estimated for each measure by surveying building contractors. Then software is used to simulate the energy needs of the building with and without the measures. From these simulations, savings estimates are derived.
As weather patterns and utility rates differ across the state, the cost-effectiveness of an energy-efficiency measure may differ from one location to another. Cost-effectiveness studies model cost-effectiveness using climate zones to approximate the weather patterns. State-wide cost-effectiveness studies perform this analysis for all 16 climate zones in the state. For utility rates, state-wide studies apply rates from the most commonly used utility in each climate zone. In some cases, studies will examine rates for two different utilities in a climate zone.