Open-Source BCA Tool
An NSPM flexible model
The Open-Source Benefit-Cost Analysis (OS-BCA) Tool is a new NESP™ initiative aimed at addressing the challenges of evaluating the cost-effectiveness of distributed energy resources (DERs) through a standardized, transparent, and flexible platform. This project, launched in January 2025, is funded by U.S. Department of Energy and E4TheFuture, with support from ICF, Recurve, and Lawrence Berkeley National Laboratory.
Based on the National Standard Practice Manual™ (NSPM), the OS-BCA tool will allow jurisdictions to create and optimize their Jurisdiction-Specific Tests (JSTs) for single or multiple DER portfolios, ensuring that cost-effectiveness tests reflect local policy priorities, regulatory needs, and energy goals. The model will also allow users to select traditional cost tests (e.g., utility cost test, total resource cost test, societal cost test) to serve as secondary tests, as well as to assess associated rate impacts. The model design will simplify and streamline the evaluation of a wide range of value streams for DER investments, enabling consistent comparisons across jurisdictions.
What is Open Source?
The term open source refers to something people can modify and share because its design is publicly accessible. Open source software is software with source code that anyone can inspect, modify, and enhance. The OS-BCA tool will be a modern software system developed using Python and SQL. It will offer two user pathways:
Stand-alone pathway will enable users to input data and assumptions using a straightforward Excel input template. The stand-alone tool will extract data from the input template and export summary results to a “human-readable” Excel workbook, as well as detailed results to CSV files.
Integrated pathway will require software development practices that will allow users to integrate the tool into their existing analysis frameworks. The open-source tool allows users to add in or utilize the codebase to fit into their existing BCA modeling programs.
The OS-BCA tool will provide user-friendly interfaces, Excel input templates, and formatted Excel outputs for efficient data input and extraction. It will develop a set of validation cases to ensure compliance with NSPM methods and validate the performance of third-party tools in comparison to the NSPM tool.
Why is the OS-BCA Tool Needed?
Many U.S. jurisdictions face challenges when formulating cost-effectiveness tests for DERs. Despite the growing reliance on BCA to inform utility and regulatory decisions, existing tools often fall short. Current models are limited because they are typically restricted to traditional cost tests (CA Standard Practice Manual) and do not allow for flexibility with NSPM and use of a JST. These models are often designed to address only a single DER type (e.g., energy efficiency, storage, or electric vehicles), and many are proprietary, operating as “black box” models that lack transparency in their input assumptions.
Open-source models, by contrast, provide transparency, enabling users to view the underlying algorithms and methodologies. Existing spreadsheet-based models, often slow and cumbersome, struggle to analyze large datasets and fail to capture key temporal and locational impacts. Software-based tools can efficiently analyze a wide range of DER measures, multiple DER types, and the necessary temporal and location-specific impacts for BCA, all while ensuring clear presentation and transparency of inputs and results.
- Transparency: Users can easily access the assumptions, methodologies, and calculations behind the results.
- Customization: Jurisdictions can design cost-effectiveness tests tailored to their specific needs, incorporating a wide range of value streams.
- Consistency: The tool provides a common framework for evaluating cost-effectiveness, ensuring comparability across different regions and stakeholders.
- Efficiency: Reducing reliance on third-party consultants and “black-box” modeling tools, the OS-BCA Tool promotes clarity and confidence in BCA results.
Who Can Benefit from the OS-BCA Tool?
The OS-BCA Tool is designed for a variety of energy sector stakeholders, including:
- Regulators and Utilities: Ensure cost-effectiveness tests align with jurisdiction-specific policy goals and objectives.
- Energy Planners and Consultants: Streamline BCA processes by providing a clear, standardized approach to evaluating DER impacts on the grid.
- Policymakers: Support decision-making with accurate, transparent cost-effectiveness results that reflect both utility and non-utility system benefits.
- Stakeholders in DER Programs: Optimize energy resource portfolios for grid and carbon reduction performance.
This tool is especially valuable for jurisdictions that have not yet adopted comprehensive or customized benefit-cost tests due to the complexity or limitations of current tools, though the tool can be integrated into existing utility models.
Key Features of the OS-BCA Tool
The OS-BCA tool will be hosted in GitHub, which is the best practice for building, updating, and sharing transparent and well-documented software tools. Key features will include:
- User-friendly Interface: For organizations and users of varied technical abilities, with easy to navigate Excel templates for input assumptions and clear output formatting.
- Flexible Evaluation: Jurisdictions can evaluate a wide range of value streams relevant to their specific energy and policy objectives.
- Methodology Compliance: The tool will adhere to NSPM guidelines, ensuring consistent and reliable results that align with industry standards.
- Integration and Stand-alone Usage: Users can choose to coordinate with existing analysis frameworks or use the tool independently.
State Engagement and Training on Use of the OS-BCA Tool
The Project Team is engaging with interested jurisdictions, starting with Michigan, to inform the model development. Once the model is developed, the project team will provide training to help ensure that state agencies and stakeholders have a basic understanding of the model including its features, capabilities, user interface, and pathways available to states/stakeholders, with examples of inputs and outputs. Training will comprise:
- Webinars, tutorials and instructional videos to assist users in effectively utilizing the tool.
- In-depth training will focus on the two user pathways—stand-alone and integrated.
- On-demand state technical assistance with “office hours” and/or direct TA will assist states in configuring the tool for their jurisdiction specific test. The project team may provide TA for a cohort of states.
The OS-BCA Tool promises to advance the consistent use of NSPM principles in BCA, improve decision-making processes, and ensure that DER programs are optimized for maximum impact. For state agencies (e.g., public utility commissions, state energy offices) seeking to learn more about the development of this resource, please contact NSPM@nationalenergyscreeningproject.org
When Will the OS-BCA Tool Be Available?
The OS-BCA Tool is under development. It will likely be available for use in Q1 2026, providing jurisdictions with a robust, easy-to-use platform for conducting comprehensive BCAs of DER programs.
Background: NESP commissioned a report, National Standard Practice Manual Benefit-Cost Analysis Model Assessment that examined key existing BCA models for alignment with the NSPM framework. Apex Analytics conducted a high-level assessment of energy efficiency BCA models to review their compatibility with the NSPM framework and to identify recommendations for improvements. This review and subsequent discussions with states and U.S. DOE, led to the launch of the 2025 Open-Source BCA Modeling project.