SCE priced inspection risk and found a $449K sampling sweet spot

Southern California Edison, which serves more than 14 million people, runs energy-efficiency programs that pay incentives for installed equipment. Post-installation inspections verify that the savings claimed are real, but inspecting every project is expensive.

UC Irvine researchers built a prediction model that estimates, for any sampling plan, the expected inspection cost and the incentive dollars at risk from unverified claims. For one residential program, the model showed a 30.5% inspection rate minimized total cost at $449,000, versus the prior rule of inspecting everything over a threshold plus a fixed 20% random sample.

The tool let program managers see the risk-cost trade-off for every sampling strategy instead of relying on a fixed rule.