Market transformation and the evolution of energy programs
Utilities are adopting market transformation strategies to drive lasting change in the energy efficiency landscape. At the 2024 CLEAResult Energy Forum, industry experts discussed how utilities can use market transformation programs to promote new approaches and technologies that reshape the market. They explained how market transformation differs from traditional energy efficiency (EE) programs and shared strategies utilities can use to create long-lasting change as the market continues to evolve.
What is market transformation?
Market transformation programs aim to create permanent, sustained changes in the market. Unlike traditional EE programs that focus on short-term savings, market transformation programs seek to change the way the market operates even after program interventions end. This means moving beyond rebates and incentives and focusing on upstream changes, such as influencing manufacturers and distributors to adopt new standards.
One panelist from Northwest Energy Efficiency Alliance (NEEA) explained that one challenge is that market transformation can seem intangible because it targets structural changes at the market level. NEEA relies heavily on logic models to identify barriers and develop specific metrics to track whether the market is moving in the desired direction. This approach helps utilities better understand their progress and demonstrate success in a way that’s measurable and transparent.
Using federal and state funding to drive market transformation efforts
New federal and state funding, such as the Inflation Reduction Act (IRA), provides a unique opportunity for utilities to develop market transformation programs that can sustain demand for energy efficiency services long-term. It was noted that the IRA requires states to file market transformation plans to access funding, ensuring that new programs are designed to create continued demand even after the funding ends.
Overcoming challenges in market transformation programs
Implementing market transformation programs comes with challenges, especially for utilities that are tied to immediate savings goals. Some programs justify the value of educational and training programs by showing how these efforts lead to greater adoption of energy-efficient technologies over time.
NEEA emphasized that collaboration with manufacturers, distributors, and other stakeholders is key. For example, NEEA worked with manufacturers to introduce heat pump dryers to the U.S. market—demonstrating how partnerships can accelerate adoption and transform the market.
Key takeaways
- Focus on lasting change: Market transformation aims for permanent changes that continue after the program ends.
- Use federal funding strategically: Align new programs with federal and state funding requirements to sustain demand for energy efficiency.
- Collaboration is key: Work with partners and stakeholders to overcome barriers and drive upstream changes.
- Measure success with data: Use data to track progress, adoption rates, and long-term outcomes.
Check out more lessons learned from our 2024 CLEAResult Energy Forum conference.
