An Industry Transformation Framework for Achieving Sustainability

Patrick Eilert and Gary Fernstrom, Pacific Gas & Electric Company

Keywords

Abstract

In regions of the U.S. with prevalent energy efficiency programs, Market Transformation (MT) has replaced Resource Acquisition (RA) and its limited objective of saving energy. MT carries the greater goal of creating sustainable change in commerce for energy efficiency (EE) but, despite attempts to address sustainable change through program planning, many of today’s market transformation programs are only an incremental step beyond yesterday’s resource acquisition programs. This paper briefly examines why, and assesses the limitations of the market transformation framework. Additionally, an alternative framework, Industry Transformation (IT), is proposed that leads to legitimate paths to sustainable change.

Market Transformation’s problems emerge from the model’s limited scope which, for most public purpose programs, emphasizes technology supply and defines sustainability as the reduction of market barriers in the building industry. Implementation leads to projectlevel interventions diffused across numerous technologies, building industry actors, and customer business types, leading to a complex problem involving thousands of potential barriers. Since the MT model does not provide for resolving such complexity, program designers usually resort to their own experience, often acquired from resource acquisition.

Industry transformation has a broader scope that addresses strategic needs of unlike industries (competitive groups) that represent supply (the building industry) and demand (public and private sector entities) for EE. IT focuses on clearly defined industries first, and technologies second, permitting the use of Strategic Management concepts to analyze industries, and providing a legitimate framework for applying Diffusion of Innovations theory. Moreover, IT is more intuitive than MT, and clearly defines sustainability as one of three strategic objectives: corporate business strategies, codes or standards, or social change.