Energy efficiency is the ratio between the amount of energy put to use by a particular device or process (e.g. a refrigerator or a car) and the energy supplied to it. The unused portion of the supplied energy is wasted, usually dissipated as heat. The closer the ratio comes to 1, the more efficient the device or process is. Thus, when we buy a hybrid car, we are using the energy of gasoline more efficiently than if we drove a standard automobile.

Conservation, on the other hand, is about preserving energy by using less of it. Thus, when we turn out the lights as we leave a room, we are conserving energy.

Oddly, these two concepts, efficiency and conservation, do not necessarily go hand in hand. Improved efficiency can often lead to an increase in consumption, the opposite of conservation. This is a phenomenon called the "Jevons Paradox", first noted by the nineteenth century British economist, William Stanley Jevons, who based his ideas on his observations of the industrial revolution in England.