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What do we do with energy efficiency laggards?

In the adoption of technology or new ideas in general, there is always a group of people that are last.  You know–the person who just got their first smartphone, still buys compact discs, or gets their news from an actual “paper” newspaper.  This group is called “laggards,” and we all know someone in this group.  In 1962 Everett Rogers defined categories of consumers based on when they typically adopted technology.  The concept is widely known, and marketing experts are keenly aware of this concept when targeting consumers in the context of product lifecycles.

Similar parallels can be used for energy efficiency.  As technology evolves and new options for energy efficiency emerge, the rate at which the marketplace adopts energy efficiency follows a very similar curve.  For example, LED lighting technology first became commercially available in 2008.  Shortly thereafter a LED option for the standard 60w Edison screw became available in 2009.  Even with unproven technology at high costs, there was a small percentage of the marketplace that was eager to replace their existing lighting with new LED technology.  These were the innovators.  As LED technology improved and costs decreased, energy efficiency programs began to support LED lighting with incentives and rebates, marketing efforts, and services to encourage the adoption of the technology.  Energy efficiency programs greatly influenced the increased market adoption of LEDs.  Program evaluators along with energy efficiency policy makers recognized the positive impact energy efficiency programs had upon the marketplace and gave energy efficiency programs high program influence (Net to gross) scores.

As we move into 2018, LED lighting is becoming mainstream.  The technology has improved and costs have plummeted.  With utility programs supporting further price reductions, some believe it is a “no brainer” to choose LED lighting over more traditional technologies.  While some areas of the country are still in the early majority, other areas may be moving into the late majority of the technology adoption curve.  In some places, policy makers and evaluation staff have argued that, because the technology has matured and prices have decreased, energy efficiency programs shouldn’t get credit for influencing further adoption of LED lighting.  Some have even claimed that the lighting market has “been transformed” and there isn’t a need for programs to support LED lighting and get credit for the associated impact (savings).

There is one big problem with claiming that the lighting marketing is “transformed” and therefore energy efficiency programs aren’t needed.  It isn’t true.  There are plenty of incandescent lamps and T12 lighting still in homes and buildings where energy efficiency programs are not allowed to claim lighting savings.  In these areas, LED technology is considered “standard practice” by policy makers and the evaluation community, not because everyone in the market has adopted LED lighting.  The unintended consequences of this approach are extremely damaging to a true full transformation of the lighting market.  Here is my rationale:

  1. Replacement incandescent A lamps and T12s are still available for purchase
  2. By removing program incentives, laggards will face higher costs to replace older lighting equipment with LEDs and will likely remain with traditional replacement components
  3. If energy efficiency programs can’t count the savings from market laggards, the programs won’t spend marketing / outreach efforts trying to convince these customers to replace their lighting with newer LED technology. This could result in a lost opportunity to promote incremental savings opportunities such as smart lighting controls which are much cheaper to install during a system lighting retrofit than afterwards.

If the goal of energy efficiency programs is get customers to become more efficient, why are we stopping short of the entire marketplace when we know laggards exist in the marketplace?  Claiming early victory in the transformation of the lighting market doesn’t serve the best interest of customers or the energy efficiency industry.

Steve Baab:  Steve works at DNV GL as the Service Line Leader for Program Development and Implementation.  Steve works to bring best practices and innovative program ideas to DNV GL clients.  Before coming to DNV GL, Steve was the ComEd C&I portfolio manager where he led the Smart Ideas program from initial launch in 2008 to a program that offers a wide spectrum of customer solutions in both energy systems and market segments.

1 Comments Add your comment
Avatar Dylan says:

Good points, Steve. Thanks for sharing. Seems like limiting energy efficiency programs from supporting the LED market will only increase acquisition costs of the “laggards” in the future when the market is mostly converted.

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