This is such a bizarre setup.

> American Efficient then used that sales data to calculate the energy savings from the anticipated use of the lighting and appliances, entering those projected savings into “capacity auctions.”

> At capacity auctions, grid operators pay for the ability of traditional power suppliers and utilities— as well as energy-efficiency aggregators like American Efficient—to produce power when needed.

The home depot example shows it more succinctly. How does American Efficient sending a small check to home depot mean that they get to bid for having produced capacity?

If I squint I can almost imagine the goal of this setup. If you want people to use less power you could definitely promote energy efficient appliances and lighting via market forces.

But doing so at capacity auctions seems ridiculous. If your power company wants it then they should cut checks directly to the consumer as a discount/subsidy on energy efficient appliances.