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Energy EfficiencyEnergy Efficiency::Why California NeedsWhy California Needsa Strategic Paradigm Shifta Strategic Paradigm Shift

August 2011

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The Problem: IOU Administration is Not Achieving the State’s EE Goals

CPUC independent evaluation shows IOUs significantly missed their 2006-08 Energy Efficiency (EE) goals.

The IOUs endeavor to influence policies that create the illusion of energy savings that don’t off-set building power plants.

Programs promote short-lived energy savings, but long-lived subsidies.

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The Solution: Market Transformation

A paradigm shift is required toward strategies that expand energy savings potential.

Energy savings potential is expanded in a continual cycle of breaking barriers and creating market sustainability without ratepayer subsidies.

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What is Market Transformation?

Identifying market barriers impeding the adoption of an energy efficiency measure.

Introducing a market intervention to remove the market barrier.

Creating an exit strategy to stop funding the interventions when barriers are removed and the market takes over and becomes sustainable.

Market Transformation is a strategy to influence a sustained Market Transformation is a strategy to influence a sustained consumer demand for an energy efficiency measure or strategy.consumer demand for an energy efficiency measure or strategy.

Market Transformation is achieved by…

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Barriers to Energy Efficiency

Market Barriers Availability Awareness Accessibility Acceptability Affordability

Institutional Barriers Financing Tax Codes Split Agency: Uneven distribution of cost and benefits

Owner-Renter, Old-Owner-New-Owner Outdated Codes and Standards Enforcement of Codes and Standards

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Technology Adoption Curve

Derived from: http://www-rohan.sdsu.edu/~renglish/370/notes/chapt11/adoption_curve_05.gif

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Market Transformation Curve

Source: NEEA

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IOUs are Unsuitable to Manage Market Transformation

Core business is to ensure the availability of energy and to reliably deliver it on demand.

Accommodate growth in energy demand through investment in power plants.

Protected franchises with objectives to maximize shareholders returns.

No expertise in cultivating and transforming markets to facilitate voluntary adoption of innovative technologies, products, and services.

No expertise to manage a new Market Transformation paradigm that is necessary to shape strong, competitive markets that can influence customer choice and spur a robust green economy.

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A New Administrative Paradigm is Required

A non-profit, third party administrator with expertise in Market Transformation.

Under the guidance and oversight of a coalition of relevant state agencies and progressive stakeholders.

Develop and implement strategies to yield real and long-lasting EE savings.

Avoid duplication of cost and efforts, lower product costs, and promote competition for green jobs.

Streamlining EE is essential at a time when customers are being asked to support myriad costly initiatives to upgrade the state’s infrastructure which could cost trillions.