Cooling Off Periods?

March 13, 2008 (PLANSPONSOR.com) - Conventional wisdom has long held that daylight saving time saves energy, but a new study suggests otherwise.

In fact, recent research conducted in Indiana found that residential electricity usage increased between 1% and 4%, some $8.6 million a year. It also said that "social costs" from increased emissions were estimated at between $1.6 million and $5.3 million per year.

Up until two years ago, only 15 of Indiana's 92 counties set their clocks an hour ahead in the spring and an hour back in the fall, with the remainder continuing on standard time all year (at least in part because farmers in the Hoosier State resisted the prospect of having to work an extra hour in the morning dark). That finally came to an end after the Indiana Legislature voted to put the entire state on daylight-saving time beginning in the spring of 2006.

That change provided University of California-Santa Barbara economics professor Matthew Kotchen and Ph.D. student Laura Grant a unique way to see how the time shift affects energy use. According to Reuters, they were able to compare energy consumption before and after counties began observing daylight-saving time (readings from counties that had already adopted daylight-saving time provided a control group that helped them to adjust for changes in weather from one year to the next).

Heating Bills?

The results: As noted above, having the entire state switch to daylight-saving time each year costs Indiana households an additional $8.6 million in electricity bills. The researchers concluded that the reduced cost of lighting in afternoons during daylight-saving time is more than offset by the higher air-conditioning costs on hot afternoons and increased heating costs on cool mornings.

"I've never had a paper with such a clear and unambiguous finding as this," says Mr. Kotchen, who presented the paper at a National Bureau of Economic Research conference this month.