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2013 -2014 Energy Efficiency Programs
<br />Local Government Partnership Program
<br />Program Implementation Plan
<br />transformations. Due to the subjective nature of these judgments, it is imperative that
<br />baselines as well as milestone MT targets be determined and agreed upon through
<br />collaborative discussion by all stakeholders, and these targets may need periodic revision as
<br />deemed necessary by changing context.
<br />Market transformation draws heavily upon diffusion of innovation theory9, with the state of a
<br />market usually characterized by adoption rate plotted against time on the well -known S-
<br />shaped diffusion curve. In practice, however, the diffusion curve of products may span
<br />decades10. Market share tracking studies conducted 3, 5 or even 10 years after the start of an
<br />MT program may reveal only small market transformation effects t 1. The ability to make
<br />causal connections between these market transformation effects and any particular program's
<br />activities fades with time, as markets continually change and other influences come into play.
<br />These challenges mentioned above are in reference to programs that were specifically
<br />designed to achieve market transformation; and these challenges are only compounded for
<br />programs that were primarily designed to achieve energy and demand savings. However,
<br />since the inception of market transformation programs almost two decades ago, many lessons
<br />have been learned about what the characteristics of successful MT programs are. First and
<br />foremost, they need to be designed specifically to address market transformation. "The main
<br />reason that (most) programs do not accomplish lasting market effects is because they are not
<br />designed specifically to address this goal (often because of regulatory policy directions given
<br />to program designers.) 12" The Strategic Plan recognizes that regulatory policies are not yet in
<br />place to support the success of market transformation efforts13, but also reflects the CPUC's
<br />directive to design energy efficiency programs that can lay the groundwork for either market
<br />transformation success or for codes and standards changes.
<br />Above all else, the hallmark of a successful market transformation program is in the
<br />coordination of efforts across many stakeholders. The most successful MT programs have
<br />involved multiple organizations, providing overlapping market interventions 14. The Strategic
<br />Plan calls for coordination and collaboration throughout, and in that spirit the utilities look
<br />forward to working with the CPUC and all stakeholders to help achieve market
<br />transformation while meeting all the immediate energy, demand, and environmental needs.
<br />Drawing upon lessons learned from past MT efforts, the Energy Center of Wisconsin's guide
<br />for MT program developers 15 suggests that the first step is not to set end -point definitions,
<br />progress metrics or goals. Rather, the first steps include forming a collaborative of key
<br />participants. As the Strategic Plan suggests, these may include municipal utilities, local
<br />governments, industry and business leaders, and consumers. Then, with the collective
<br />expertise of the collaborative, we can define markets, characterize markets, measure
<br />s Nadel, S., Thorne, J., Sachs, H., Prindle, B., and Elliot, R.N. (2003). "Market Transformation: Substantial Progress from a
<br />Decade of Work." American Council For an Energy - Efficient Economy, Report Number A036. Available at:
<br />http://www,accee.org/pubs/a036ftill.pdf
<br />Rogers (1995) Diffusion of Innovations, 5 °i Ed.
<br />10 Example in bottom chart of this graphic from NYTimes:
<br />http: / /www.nytimes,com /imagepages/ 2008 /02 /l0/ opinion /l Oop.graphic.reacly,html
<br />Scheid et al (2001) p. 6 -5,
<br />Peters, J.S, Mftst,B., Ignelzi, P., Megdat, L.M. (1998). Market Effects Summary Study Final Report Volume 1. Available at
<br />http://citmac.org/publications/19981215CA-DOOOIME.PDF.
<br />" CPUC (2008) Strategic Plan, p. 5.
<br />14 Nadel, Thorne, Saches, Prindle & Elliot (2003).
<br />" Peloza & York, (1999).
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