Market transformation ideas in Phase I

As part of the market transformation initiative (MTI) development process CalMTA is has been reviewing, scoring and prioritizing ideas viable for market transformation (MT) strategy. In collaboration with our Market Transformation Advisory Board (MTAB), a second set of ideas, which represent efficiency technologies and practices, have moved forward with further investigation and development of Advancement Plans. Advancement Plans outline the market research, strategy pilots, and other investigation necessary to fully determine whether a concept should be developed into a full MTI Plan for implementation.  

The ideas presented below were scored highly in our process and will broaden the reach of the ideas currently in Phase 2. All of the ideas have been selected from the 117 ideas submitted through the Request for Ideas held in summer 2023. Learn more about each of the ideas received during the RFI in a Stage 1 Disposition Report. 

The four ideas recommended for advancement at our January 25 MTAB meeting include:

  • Efficient Streetlighting 
  • Residential Heat Pump Water Heating (HPWH)   
  • Commercial Replacement & Attachment Window Solutions (CRAWS)  
  • Food Service Water Heating 

Efficient Streetlighting 

Sector: Municipal 

Product Definition: There are several ways to reduce the amount of energy consumed by streetlights, including more efficient luminaires and ballasts, design strategies that reduce the lighting intensity (while still ensuring driver and pedestrian safety), and advanced control strategies that allow lights to be dimmed or turned off in response to various inputs. Development of this idea would focus on LED streetlights with high (90+) Color Rendering Index (CRI) with dimming controls and automatic and/or controllable regulation of light based on time, schedules, human presence, traffic, and/or weather. It will also support design and management practices that are tailored to the needs of local communities, enabling further energy and cost savings.    

Preliminary Market Transformation Theory: In California, roadway streetlights in a city or county are typically owned by investor-owned utilities (IOUs), the city, or both. Streetlighting can account for as much as 50% or more of a municipality’s energy bill, while retrofits or replacements to LED can result in savings of more than 60%. There are currently an estimated 1.6 million streetlights in California that could be targeted for increased efficiency. 

Barriers to widespread adoption at the city or county level include financial strain, not owning the streetlights, and incomplete information on available cost-effective options for older decorative models. These barriers can disproportionately impact environmental and social justice (ESJ) communities. 

Establishing standards, processes, and financial resource information for IOUs and municipalities to rapidly convert high-wattage or outdated streetlight technologies to LED will spur market adoption. Education for municipalities on the variety of loans, financial tools and ESCO partnerships will also contribute to market growth. CalMTA would work with municipalities and other market actors to refine and establish streetlight design assessment resources, allowing municipalities to proactively design and convert custom streetlights that will increase energy efficiency and provide other benefits. In addition, this MTI would engage the supply chain to streamline streetlight procurement and influence educational efforts for designers and installers, especially for decorative or historical lighting, which can be more challenging. 

Residential Heat Pump Water Heating 

Sector: Residential multi-family, existing, and new construction

Product Definition: All-electric residential heat pump water heaters (HPWHs) employ a compressor-based heating system to extract heat from the air and use it to heat water, making them far more efficient than conventional electric and gas water heaters. They also generate significantly fewer emissions than gas water heaters.    

Nearly all residential HPWH products are “hybrid heat pump” models that also include electric resistance heating elements for backup heating. These heating elements improve recovery times in periods of high demand for hot water, but they draw about 10x the power of the heat pump, so it is important for HPWHs to be sized, installed, and controlled to minimize the use of resistance backup during periods of high demand on the electricity grid.   

Preliminary Market Transformation Theory: There are numerous statewide and national efforts targeting this technology. Yet, despite the many programs behind this technology, HPWHs still make up less than 2% of the water heater market despite having been commercially available for nearly 15 years. CalMTA will align existing efforts to create common goals, a strategic approach to market engagement, and cost neutralization, as well as identifying opportunities and processes to coordinate resources across programs to accelerate the pace of HPWH adoption in California.  

This MTI would leverage intervention strategies primarily focused on facilitation, coordination, and long-term strategy design. 

This MTI would focus on increasing adoption of efficient, demand flexible HPWHs in the residential replacement market. Products include both 120-volt and 240-volt options, in sizes ranging from 40 to 80 gallons, and must be ENERGY STAR® qualified with a Uniform Energy Factor (UEF) of 3.3 and a sound rating below 50db. The MTI would also support products with connectivity and controls that can manage and optimize electricity demand, minimizing the use of backup electric resistance heating during peak demand periods. Lastly, the MTI would support sizing and design strategies that ensure the water heater can support energy storage and load shifting without posing a risk to consumers. 

Commercial Replacement & Attachment Window Solutions 

Sector: Commercial 

Product Definition: Single-pane replacement (SPR) utilizes the unique properties of vacuum-insulated glass (VIG) to increase uptake and investment in commercial retrofits, especially for buildings with single pane glass. SPR involves the use of ultra-high-performance VIG with a nominal thickness of ¼” to ½” and an insulating R-Value of R-10 to R-15. VIG replaces a ¼” single- pane glass in existing commercial frames and improves thermal performance of the glass by a factor of 5-10x. SPR with VIG provides fuel neutral savings and reduces HVAC load by as much as 40%. The reduced load then provides an easier pathway for commercial building owners to convert from conventional HVAC systems to heat pump systems at reduced electrical load.    

Alternatives to VIG include commercial secondary windows (CSW). CSWs attach to the interior or exterior of the existing window, creating an additional insulating layer and offering options for solar control via low-E films. CSWs improve room comfort less than VIG replacements, but still significantly reduce HVAC load, are a more mature technology, less expensive and, like VIG replacements, can be installed without opening the façade or disrupting occupants. 

Preliminary Market Transformation Theory: Windows are responsible for about 10% of energy use in buildings and influence end uses that comprise 40% of building energy use1. The target market for this MTI represents over 75% of California’s 3.2 million existing commercial buildings built between 1965 and 2000. Many of these buildings have inefficient, single pane glass. Yet replacing windows is very expensive and involves extensive tenant disruptions; thus, single-pane windows are replaced at a rate of only 1% per year.   

This MTI would take advantage of growing awareness that poor performing commercial windows need to be addressed if existing buildings are to be successfully decarbonized. A key leverage point would be the rise of commercial building performance standards that compel building owners to reduce their buildings’ energy use, or face penalties. CalMTA would also leverage aggregators in the commercial building market to build market awareness on VIG’s and CSWs’ extensive benefits and business case. A third strategy would be to work with the National Fenestration Rating Council (NFRC) and other industry partners to build the needed testing, certification, and documentation systems for VIG. We would also engage local utility programs to offer incentives to help bring down the cost in the near-term. 

Food Service Water Heating 

Sector: Commercial Food Service 

Product Definition: Medium-duty electric commercial water heaters with the ability to meet the unique hot water demand, delivery/recovery rate, and water temperature requirements of the foodservice industry offer significant emissions reductions and energy savings relative to the incumbent gas water heating technology used in most commercial kitchens. Opportunities to improve efficiency of electric water heating systems include: 1) integrated multi-function heat pump systems that provide simultaneous space cooling and water heating; and 2) heat recovery systems that capture waste heat from kitchens and dishwashing machines to pre-heat water or reduce overall hot water demand. 

Preliminary Market Transformation Theory: The commercial foodservice sector has the highest energy intensity of all commercial building types, consuming up to five times more energy per square foot than other commercial buildings. Roughly 28% of all commercial sector natural gas use is from restaurants and food stores2. Decarbonization goals and regulatory pressures create both a need and an opportunity to accelerate the market shift from gas to electric foodservice equipment. However, transitioning commercial kitchens from gas to electric across all appliances may result in significant upfront and ongoing costs. Targeting water heating will allow CalMTA to explore carbon reduction strategies that may be applicable across broader commercial kitchen appliances while focusing on an end-use that provides a stronger value proposition to business owners.    

This MTI would support adoption of ENERGY STAR certified, medium-duty commercial electric water heaters that are designed, configured, and controlled to optimize electricity use and allow demand flexibility. To reach and influence the target market it would engage the supply chain and industry to increase the stocking, sale, awareness, training of available equipment while working with manufacturers to influence the development of new products. 


[1] Partnership for Advanced Window Solutions at U.S. Department of Energy

[2] Itron, Inc. 2006. California Commercial End Use Survey. Prepared for the California Energy Commission. CEC400-2006-005.

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