Market Segmentation and Energy Efficiency Program Design

This white paper, based on experience in California, makes the case for market segmentation beyond the traditional broad customer class definitions (e.g. residential, commercial, industrial, agricultural etc). For example, recent energy efficiency programs by the CA investor owned utilities specifically targeted wineries and dairies, which may have previously been lumped together as “agricultural” customers. The author suggests that these programs appear to more effectively reach the segmented populations than previous sector-based initiatives because segmentation results in the development of products and services that more closely match households’ and businesses’ needs and informs marketing campaigns so that they can more successfully motivate the populations of interest to action. In addition to discussing the concept in detail, this paper offers how-to guidance and suggests promising segments to consider.