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Energy Efficiency Lighting Strategies: Thinking Out-of-the-Box to Propel Innovation

Energy Efficiency Lighting Strategies: Thinking Out-of-the-Box to Propel Innovation. CPUC Workshop June 16, 2009 Cheryl Cox Ujvalla Gupta. DRA’s View for Lighting Program Objectives . Expanding technological innovation is essential to exponentially maximizing energy savings to support AB32.

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Energy Efficiency Lighting Strategies: Thinking Out-of-the-Box to Propel Innovation

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  1. Energy Efficiency Lighting Strategies:Thinking Out-of-the-Boxto Propel Innovation CPUC Workshop June 16, 2009 Cheryl Cox Ujvalla Gupta

  2. DRA’s View for Lighting Program Objectives  • Expanding technological innovation is essential to exponentially maximizing energy savings to support AB32. • Lay the foundation NOW to optimize Lighting technology. • Recognize that to achieve innovation the competitive market is a critical component. • Lighting programs should aid in breaking barriers and then move out of the way for the market to take over. • Lighting programs are successful only if the behaviors are permanently sustained once subsidies are removed. • Investment must be made in lighting technologies with long lives and that are more environmentally friendly.

  3. Laying the Foundation Nowto Realize Future Benefits “The Stone Age Didn’t End Because We Ran Out of Stones”- Thomas Friedman, ‘Hot, Flat, and Crowded’ • Focusing solely on CFLs, without planting the seeds for optimal technologies now is tantamount to waiting for the last drop of oil to be sucked out of the earth, before beginning to develop solar. • Empty sockets, therefore, are beside-the-point to laying the foundation to expand more innovative technologies that can increase energy savings potential.

  4. Why is the technology adoption curve slow for CFLs? versus Source: Improvements in CFL Technology, Wikipedia

  5. EE Technology Needs to More Closely Emulate High Technology MOORE’S LAW Doubling in technological ability approximately every18 months. 2009 1980s 5 MHz 1.83GHz 2006 1983

  6. Targeting Progressive Technologies Correctly • Super CFLs and other advanced fluorescent lighting measures need to progress and build off of current strides, not start over at the beginning of the curve. • The new iPhone 3GS, for example, will not start over on the Technology Adoption Curve, but will build off of its predecessor’s success. • Not all Adopters are created equal - understand motivation.

  7. The Role of the Manufacturer: Resolving Upstream Model Issues  There is nothing so useless as doing efficiently that which should not be done at all. - Peter Drucker • Need to have a more realistic view of the abilities and constraints of the Upstream program model. • Manufacturers’ role creates limitation in targeted program design, including leakage issues. • Upstream strategies should be targeted appropriately to the Technology Adoption Curve. • Manufacturer may be better positioned to set the right rebate price without flooding market with CFLs at prices that can't be sustained.

  8. What Steps Can be Taken for 2009-11? • Re-think current approach of Upstream strategies to target appropriate aspects of the Technology Adoption Curve: • Recognize Upstream incentives may not be appropriate to influence all types of adopters. • Remove Basic CFLs from portfolios. • Limit buy-downs for Specialty CFLs based on market needs. • Significantly increase strategies to develop LEDs and other cutting-edge lighting technologies. • CPUC should require stronger demonstration of quality on lighting products that are subsidized – even if slightly more expensive, to optimize adoption. • Improve innovation process as part of a market transformation strategy: • Expand ET programs to include market players beyond IOUs. • Increase competition to develop lighting technologies faster. • Incorporate costs of Disposal / Recycling when negotiating contracts with manufacturers. • Seek solution to shotgun approach of flooding markets with over-subsidized CFLs.

  9. Auctions: Setting Appropriate Rebate Levels PROBLEM:IOU Programs set CFL quantity levels to achieve portfolio goals, not market realities. B Z Quantity (units) O X Budget Line A Incentive level ($/units) To set appropriate rebate levels • Knowing the location of Line AB is critical to setting an efficient rebate level. • Manufacturers, whose business depends on this information, are likely to have much better data on the location and shape of Line AB than program administrators. • To identify market-based rebate levels there should be an auction process to encourage manufacturers to provide information that leads to a market-clearing result – a sealed-bid auction process to reveal true preferences and choose an optimal rebate level. Source: ICF Consulting : The Role of Rebates in Market Transformation: Friend or Foe? http://www.icfi.com/Publications/doc_files/RoleofRebates-FriendorFoe.pdf

  10. Conclusions: The Role of Energy Efficiency Programs • Vehicle to break barriers, not to control the Market. • Increase energy savings potential through innovation, don’t decrease EE goals. • Overhaul ET programs to embrace the technology industries and the competitive market. • Upstream programs have strengths and limitations. • Subsidies alone are not sufficient motivators across the adoption spectrum. • Strategies should not remain static:  Technology Adoption Curve should inform and drive strategies.

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