Market Transformation Programs: Past Results and New Initiatives

Steven Nadel and Howard Geller

1996

Abstract

Market transformation is a process whereby energy efficiency innovations are introduced into the marketplace and over time penetrate a large portion of the eligible market. In the past few years, utilities, government agencies, and public interest organizations have taken an interest in encouraging market transformation through activities such as research and demonstration (R&D); demonstration projects; manufacturer incentives; education and training; consumer incentives; building codes; and equipment efficiency standards. In this paper we review a number of market transformation efforts that have occurred in recent years and also discuss several new market transformation initiatives. Based on these case studies, we conclude that: (a) market transformation is feasible; (b) the preferred market transformation strategy varies from product to product, depending on characteristics of the technology and the market being served; and (c) minimum efficiency standards and building codes often play a critical role in achieving market transformation. In order to increase the success of market transformation efforts, it would be helpful to plan and implement more comprehensive, long-term transformation strategies, develop evaluation procedures for market transformation, and design rewards for utilities that participate in successful market transformation efforts.

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22 pp., 1996, $12.00, E962