Market transformation involves ongoing and lasting change such that the market does not regress to lower levels of efficiency at some later time. Adoption and diffusion of energy efficiency measures is a complex and dynamic phenomenon involving interactions between technology, behavior, market conditions, and public policy. Decisions affecting energy efficiency are made by manufacturers, vendors, architects and builders, contractors, and consumers. New appliance models, vehicles, or other products are introduced every year. Manufacturer and consumer behavior is affected by events such as energy price swings or environmental concerns.
Markets vary in terms of prices, growth rates, competition, and other factors.
And a wide range of policies or programs including energy efficiency educational efforts, financial incentives, or regulations are possible. In spite of these complexities, energy efficiency greatly increased in many market segments in the United States during the past 20 years. These and other examples of market transformation are discussed in detail in this paper. Put simply, it often costs less to save energy than to supply energy. Thus economic productivity and economic efficiency improve as energy efficiency increases.