2. Problem Statement
Historically, we’ve seen many markets saturated with:
• Short term programs
• High, one-time incentives
• Unaddressed financial/relationship needs
• Unadjusted mid-stream strategies
3. Establishing long-lasting engagement and partnership
with an entire market increases market capacity,
measure persistency, and promotes the uptake of new
technologies.
Our hypothesis cuts across programs, but our proof
points are in the grocery market.
Working Hypothesis
4. Program Learnings
In the grocery market we've adjusted by:
• Making program design central to success
• Building upon relationships with market players
• Forming buyer groups to lower equipment costs
• Motivating manufacturers by increasing volume
• Allowing grocers to generate their own opportunities
We've succeeded by…
5. How our approach works
Navigation of four key stages – each building upon
another to reshape markets:
Cold Market Entry
Warm Market Success
Partnership with Market Actors
Transformation Leverage
•Little/no program penetration
•High cost to implement
•Moderate program penetration
•Groundwork laid for transformation
• Market actors build synergy/drive
transformation
• Cycle of new relationships generate
new opportunities
• Programs self-fueling; spread to
new markets
6. Cold Market Entry
In the beginning:
• Utility incentives drive customer and contractor
participation
• Technical field staff bridge market relationship
hurdles and identify key leverage points
• Inform to Invest strategy launched
• Aggressive incentives drive early adoption
It’s kind of like an awkward first date
7. Cold Market Entry
PNW Program Example:
• Utility in WA State issued a
two-year contract targeted
at grocers
• No relationships or market
traction
• Deployed Inform to Invest
strategy
• Developed relationship
with large independent
grocer and independents
8. Warm Market Success
The market knows who you are and is ready to listen:
• Market actors maximize promotional opportunities
• Customers see savings and build trust with
contractors
• Delivery costs decrease
• Fewer stranded opportunities
• Relationships increase
Now we’re starting to like each other
9. Warm Market Success
PNW Program Example:
• Grocer relationships lead to
contractor relationships
• With proven savings,
grocers receptive to new
technologies
• Contractors expand into
new program offerings
– Refrigerator control
systems
– Walk-in electronically
commutated motors
(ECMs)
10. Partnership with Market Actors
Market actors and customers working together:
•Business models adjusted mid-stream
•Buying groups established
•Pricing adjusted
•New technology discounted
•Projects aggregated
•Incentives offered by manufacturers
We made it to prom!
11. Partnership with Market Actors
PNW Program Example:
•Leveraged grocer
relationships to increase
volume for refrigeration
controls
•Established controls
buying group for 60 stores
•Aggregated refrigeration
motor controls projects
for supplier discount
•Increased demand for
night covers,
manufacturer dropped
price
12. Transformation
LeverageMarket actors and customers generate new opportunities:
• Program stakeholders efficiently respond to opportunities
• Customers approach the program with technical
opportunities
• Savings cycle finances next new technology
• Customers work with suppliers
• Trained contractor base increases
It’s a cultural shift everyone wants in on
13. Transformation
Leverage
PNW Program Example:
• PNW grocery chain completed
projects in 24 stores
• 1,416,571 kWh saved, over
$300,000 saved per year
• Chain generated new
opportunity, replacing several
hundred feet of old cases with
high-efficiency cases
• Program field staff
participating in design
process for new stores
15. Sustainable market transformation succeeds when
programs:
– Maximize program persistence. Offering raw
dollars in a one-time technology incentive rollout
does not often result in persistent energy
savings.
– Address the full range of market actors. Realize,
learn about and act upon market actor financial
and relationship hurdles.
– Adjust mid-stream strategies as the market
responds. Be flexible and actively adjust
programs to fit market needs.
Success
16. •Incentives cease whenIncentives cease when
technologies reach thetechnologies reach the
adoption tipping pointadoption tipping point
•Focus on market engagementFocus on market engagement
strategies, not market exitstrategies, not market exit
strategiesstrategies
•Market partnership yieldsMarket partnership yields
ongoing opportunityongoing opportunity
•PARTNERSHIP is morePARTNERSHIP is more
important than measuresimportant than measures
Some Food for Thought
17. By establishing long-lasting engagement and
partnership with an entire market, energy efficiency
programs can increase market capacity and the
delivery of new technologies to realize higher levels of
persistent savings.
Summary
Editor's Notes
Boom/bust example: CFLs
Aggressive, short-term coupons which in many cases covered 100% of product cost
Promotion succeeded, but no market organization so norms of market behavior stayed the same
Coupon pulled and market went away
Short-term savings but no long-term effect because the tech was no longer financially viable
Failure to address relationship issues example: ECMs in CA
Distribution infrastructure and relationships not properly developed
At time of measure introduction only one manufacturer in CA market
Only one contractor firm in the region with the technical expertise to install the motors
Result
No supply volume
Prices too high for mid-level market
Initial adoption by large retail chains stalled
Program lost momentum
Program growth stunted/delivery capacity reduced example: short run lighting program
Incentives offered only for the most widely-used type of lighting in a market
Rapid increase in volume drives down manufacturing costs and contractor costs
Contractor motivated to maximize promotional revenue so they cherry-pick highly incented opportunities and financially strand up to 30% of total store lighting opportunities
Urge to maximize profit results in rushed installation practices = equipment problems
Problems alienate retailer from future program offerings and EE as a whole
Area’s big opportunities snapped up and market busts
Contracting firms lay off workers
Delivery capacity in the market shrinks
Unpredictability of the program and results makes retailers very reluctant to engage in further projects
SMT through better, longer-lasting market engagement and partnership.
Systematically create relationships = influence lifecycle of entire market segment = widespread technology adoption = higher levels of persistent energy savings.
Program as meta-player in the supply chain, creating a business case for change.
