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2013 -2014 Energy Efficiency Programs
<br />Local Government Partnership Program
<br />Program Implementation Plan
<br />successful end state have not yet converged. The CPUC defines the end state of MT as
<br />"Long- lasting sustainable changes in the structure or functioning of a market achieved by
<br />reducing barriers to the adoption of energy efficiency measures to the point where further
<br />publicly - funded intervention is no longer appropriate in that specific market."' The Strategic
<br />Plan recognizes that process of transformation is harder to define than its end state, and that
<br />new programs are needed to support the continuous transformation of markets around
<br />successive generations of new technologies 2.
<br />Market transformation programs differ from resource acquisition programs on 1) objectives,
<br />2) geographical and 3) temporal dimensions, 4) baselines, 5) performance metrics, 6)
<br />program delivery mechanisms, 7) target populations, 8) attribution of causal relationships,
<br />and 9) market structures3. Markets are social institutions4, and transformation requires the
<br />coordinated effort of many stakeholders at the national level, directed to not immediate
<br />energy savings but rather to intermediary steps such as changing behavior, attitudes, and
<br />market supply chains as well as changes to codes and standards. Resource acquisition
<br />programs rely upon the use of financial incentives, but concerns have been raised that these
<br />incentives distort true marketTrice signals and may directly counter market transformation
<br />progress 6. According to York , "Market transformation is not likely to be achieved without
<br />significant, permanent increases in energy prices. From an economic perspective, there are 3
<br />ways to achieve market transformation: (1) fundamental changes in behavior, (2) provide
<br />proper price signals, and (3) permanent subsidy."
<br />The question of what constitutes successful transformation is controversial because of a
<br />Catch -22: Market transformation is deemed successful when the changed market is self -
<br />sustaining, but that determination cannot be made until after program interventions are
<br />ended. Often, however, the need for immediate energy and demand savings or immediate
<br />carbon- emissions reductions will mean that program interventions may need to continue,
<br />which would interfere with the evaluation of whether MT is self - sustaining. Market
<br />transformation success has also been defined in terms of higher sales of efficient measures
<br />than would have otherwise occurred against a baseline absent of program interventions. The
<br />real world, however, provides no such control condition. Evaluators must estimate these
<br />baselines from quantitative factors such as past market sales that may be sparse and /or
<br />inaccurate - particularly for new products. Evaluations must also defer to expert judgments
<br />on what these baselines may have been as well as on the degree of successful market
<br />California Public Utilities Commission Decision, D.98 -04 -063, Appendix A.
<br />'California Public Utilities Commission (2008) California LongTernv Energy Eficiency Strategic Plan, p. 5. Available at
<br />http:// www. catiforiiiaenergycf ficiency .com /docs /EEStrategioPlan.pdf
<br />' Peloza, .J., and York, D. (1999), "Market Transformation: A Guide for Program Developers." Energy Center of Wisconsin.
<br />Available at: http: / /www.eew.org /eewresults /i89 -l.pdf
<br />a nlumstein, C., Goldstone, S, & Lutzenhiser, L. (2001) "From technology transfer to market transformation'. Proceedings of the
<br />European Council for an Energy Efficient Economy Summer Study. Available at
<br />http://www.cceec.org/cont'erence_proceedings/eceec/200 I /Panel _2 /p2_7 /Paper/
<br />s Sebold, F. D., Fields, A., Slcumatz, L, Feldman, S., Goldberg, M., Keating, K., Peters, J. (2001) A Frannernorhfor Planning and
<br />Assessing Publicly Funded Energy Efficiency. p. 6 -4. Available at www,calmac.org.
<br />e Gibbs, M, and Townsend, J. (2000). The Role of Rebates in Market Transformation:
<br />Friend or Foe. In Proceedings front 2000 Sunnmer Study on Energy Efficiency in
<br />Buildings.
<br />r York, D, (1999). "A Discussion and Critique of Market Transformation', Energy Center of Wisconsin. Available at
<br />http://www.ecw,org/ecwrestilts/186-1,pcil.
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