Why is Market Transformation important?
Widespread use of energy-efficient products helps consumers, businesses and industry in a number of ways:

• Utility bills are reduced, saving money for the end-user and generating more local economic benefits
• Pollution and global warming are reduced, providing us with a cleaner, healthier environment
• Energy efficiency often results in increased industrial competitiveness due to greater productivity

• Limited availability of energy-efficient products
• Lack of consumer awareness of the products and their benefits
• Resistance to new products in general
• Over-emphasis on first cost vs. operating costs

What can be done to overcome these market barriers?
Restructuring should create some new opportunities for energy efficiency, but it won't remove all the barriers; in many cases, Market Transformation programs are more effective. Programs designed to overcome these market barriers are voluntary and typically begin producing results within a few years.

CEE members, through research and networking, formulate strategies to remove these barriers. A major aspect of many Market Transformation strategies is the establishment of a common efficiency specification, to be used as a voluntary guideline for manufacturers and efficiency programs around the country. This sends a uniform message to manufacturers about the importance of efficiency in their products and the level of efficiency that a large number of consumers will demand.

At the same time, utilities and energy organizations set up consumer awareness and education programs. In some cases, financial incentives (rebates) are offered to consumers and/or distributors in an attempt to "kick start" the sales of energy-efficient products. Rebates can increase the demand for efficient products, leading to greater production volume and lower prices.

Why is Market Transformation an appropriate state energy policy?
Market Transformation provides public benefits to every citizen. Even if restructuring serves to reduce utility bills, energy efficiency can decrease energy costs even more. Energy efficiency also reduces pollution and global warming while creating a stronger local economy.

How do MT programs fit into a restructured utility market?
Market Transformation is a cost-effective way to provide public benefits from energy efficiency that may no longer be provided by utility programs after restructuring. Because MT relies heavily on consumer awareness and education to remove market barriers (rather than funding a continuous flow of rebates), the cost is generally much lower.

Market Transformation focuses on products and services not readily available in the competitive market. The goal is to remove barriers so the competitive market can provide these products and services.

In addition, Market Transformation provides a more permanent solution in a competitive market. Financial incentives do increase sales, but only temporarily. Market Transformation taps the competitive forces released by restructuring for lasting results.

How do states pay for Market Transformation programs?
A fair and equitable way to fund MT programs is through a small public benefits charge, which is added to utility bills. Everyone who uses energy pays a small amount - and everyone benefits. The charge generally ranges from 1-4 mils per kWh, just a few percent of the total bill.

For most residential customers, this public benefits charge amounts to less than a dollar per month. Industrial customers pay a substantially larger total, but it is still a small portion of their overall operating costs. When you consider how much can be accomplished, energy efficiency through Market Transformation is a very economical route.

How can state energy offices support Market Transformation?
State energy offices can support MT programs by fighting for legislation that results in a retention of public benefits. State programs can also adopt MT strategies and participate in national Market Transformation initiatives as an effective way to achieve energy efficiency.

What products and services are currently being promoted by MT programs?
Below are some examples for each of the four main categories.

Residential · Clothes washers · Dishwashers · Refrigerators · Room air conditioners · HVAC systems · Lighting	Commercial · Clothes washers (laundromats,   large buildings) · HVAC systems · Lighting · Refrigerators and freezers · Ice-makers
Industrial · Motors · Motor Systems · Water/wastewater systems · Transformers · Compressed air	Government · Refrigerators · Government Purchasing · Energy-efficient traffic signals

Where can I get more information about Market Transformation?

Contact any of the following people:

• Marc Hoffman, Consortium for Energy Efficiency (CEE), 617-589-3949, ext. 210
• Brian Henderson, New York State Energy Research and Development Authority (NYSERDA), 518-862-1090, ext. 3305
• Margaret Gardner, Northwest Energy Efficiency Alliance (NW Alliance), 503-827-8416. ext. 227
• Susan Coakley, Northeast Energy Efficiency Partnerships (NEEP), 781-860-9177, ext. 12