California Residential CFL Market Status CPUC – Energy Division Hearing Room A June 16, 2009

2 Overview Awareness and Use of CFLs in California CFL sales – Statewide sales – ULP shipments CFL price Residential CFL penetration and market potential Lessons learned in other regions

3 Awareness and Use of CFLs 96% of residential customers in CA IOU territories are aware of CFLs – 92% in comparison area 79% of aware consumers in CA report that they currently use CFLs – 66% in comparison area CFL Awareness, 2008 CFL Use, 2008 * Difference from CA results is statistically significant at the 90% level of confidence. Source (both figures): CFL Market Effects Final Interim Report, 2009.

4 CA Total CFL Sales v. ULP Shipments Greater proportion of ULP shipments through non-big box than total CA sales * Awaiting final data on shipments within PG&E service territory. Sources: CFL Market Effects Interim Report, 2009 and IOU ULP tracking data. CA CFL Sales by Retail Channel, 2007 ULP Shipments by Retail Channel, 2007 * * Draft Data DO NOT CITE Total 2007 CFL sales totaled approximately 55.6 million – ULP shipments represented ~75% of total 2007 CFL sales in CA

5 ULP CFL Shipments * Awaiting final data on shipments within PG&E service territory. Source: IOU ULP tracking data. Upstream Lighting Program CFL Shipments by IOU and Retail Channel, % of ULP shipments went to non-big box stores (grocery, discount, drug, small hardware) Draft Data DO NOT CITE

6 ULP CFL Styles ULP CFL Styles by IOU, ULP Specialty CFL Styles by IOU, Draft Data DO NOT CITE * Awaiting final data on shipments within PG&E service territory. Source: IOU ULP tracking data. 11% of ULP shipments were specialty CFLs – PG&E/SDG&E had greater focus on specialty CFLs than SCE – PG&E provided incentives for the largest volume of specialty CFLs (~6.5M) Three-way, reflector, and globes comprised the majority of ULP specialty CFL incentives

7 California CFL Price Source : Preliminary Results from the 2008 California Lighting Retailer Shelf Inventory conducted by KEMA, Inc. as part of the Impact Analysis of the CA IOUs Residential Retrofit Programs. DATA IS PRELIMINARY AND UNWEIGHTED AND SHOULD NOT BE CITED IN OTHER CONTEXTS. Draft Data DO NOT CITE Average CA Prices for IOU-Discounted CFLs, Non-IOU CFLs, and All CFLs by Style, 2008 Incremental cost for non-IOU vs. IOU-discounted lamps – $2.00 for basic bare spirals – Roughly $2.50-$7.50 for specialty lamps Reflector CFLs among most abundant and most expensive specialty styles

8 California CFL Price * Basic Bare Spiral refers to single-wattage non-dimmable bare spiral CFLs. Source : Preliminary Results from the 2008 California Lighting Retailer Shelf Inventory conducted by KEMA, Inc. as part of the Impact Analysis of the CA IOUs Residential Retrofit Programs. DATA IS PRELIMINARY AND UNWEIGHTED AND SHOULD NOT BE CITED IN OTHER CONTEXTS. Average prices for IOU-discounted CFLs are similar to prices for comparable incandescent styles – For basic bare spirals and also for specialty lamps Draft Data DO NOT CITE Average CA Prices for Incandescent Lamps, IOU-Discounted CFLs, Non-IOU CFLs, and All CFLs, 2008

9 California Residential CFL Penetration 91% of CA homes in IOU territories have 1 or more CFLs installed Average number of lamps per home is 48.7 Average number of CFLs per home is – 10.3 among all homes – 11.3 among homes that have 1 or more CFLs installed Source : Preliminary Results from the CPUCs Residential Lighting Metering Study (KEMA, 2009). Percent of California IOU-Territory Homes by Number of CFLs Installed, 2008

10 California Residential CFL Penetration Approximately 21% of sockets are currently using CFLs – 74% of these CFLs are spirals – 90% are MSB – 7% are on controls other than on/off switch 3% of all CFLs are in dimmable sockets 4% of all CFLs are in 3-way sockets Sockets with CFLs by Lamp Shape, Base Type and Control Type, 2008 n = 6,583 sockets. Source: Preliminary Results from the CPUCs Residential Lighting Metering Study (KEMA, 2009).

11 CA Residential Lighting Market Potential Sockets can be characterized by energy savings potential – Higher potential sockets are in locations with relatively high hours of use and/or relatively low on/off switch rates – Lower potential sockets are in locations with relatively low hours of use and/or relatively high on/off switch rates Note that for the purposes of this analysis, hours of use are based on 2005 CA CFL Metering Study (metering results not yet available from current study) Final characterizations will reveal lamp style/control combinations with greatest/least remaining residential market potential

12 CA Residential Lighting Market Potential 53 million MSB high use sockets available for CFL installation – Such sockets currently use non-CFL a-lamps with on/off controls – 145M total non-CFL MSB a-lamps in use 42 million MSB spiral CFLs (basic CFLs) are in storage in CA households – If installed in highest use locations, these could theoretically achieve most of the remaining energy savings for a-lamps 2008 Remaining CA (non-CFL) MSB A-Lamp Sockets with On/Off Controls by Savings Potential Source: Preliminary Results from the CPUCs Residential Lighting Metering Study (KEMA, 2009). Higher/lower characterizations based on HOU from 2005 CFL Metering Study. Draft Data DO NOT CITE

13 Source: Preliminary Results from the CPUCs Residential Lighting Metering Study (KEMA, 2009). Reflector and globe style MSB lamps with on/off controls represent the greatest potential among specialty lamps – Higher/lower savings potential designations below are a placeholder for final data from current metering study Draft Data DO NOT CITE CA Residential Lighting Market Potential 2008 Remaining (non-CFL) MSB Sockets by Lamp Type, Control Type, and Savings Potential

Remaining (non-CFL) SSB Sockets by Lamp Type, Control Type, and Savings Potential Draft Data DO NOT CITE Source: Preliminary Results from the CPUCs Residential Lighting Metering Study (KEMA, 2009). CA Residential Lighting Market Potential Small screw-base (SSB) lamps represent 10% of total residential sockets Decorative lamps with on/off controls represent greatest remaining SSB potential – Higher/lower savings potential designations below are a placeholder for final data from current metering study

15 The Northwest CFL Market The Northwest Energy Efficiency Alliance (NEEA) began promoting CFLs in 1997 – Began offering strategic/targeted upstream CFL incentives in 2005 Excluded large home improvement (DIY) stores and wholesale clubs starting in 2006 NEEA reached its 2009 CFL sales goal at the end of 2007 (10.8M CFLs/year) – Withdrew CFL incentives from the Northwest market in early 2008 Other Northwest energy-efficiency program sponsors (e.g., BPA) continued CFL incentives in 2008 – Roughly half of 2008 incentives in the Northwest were for specialty lamps

16 California vs. Northwest California and the Northwest have had similar CFL promotion strategies – Began market support in big box stores, transitioned focus toward grocery/drug/small hardware – Began market support for basic bare spirals and introduced specialty CFLs later California and Northwest CFL markets and incentive strategies differ in at least 3 ways – CFL sales volume – CFL retail channels – CFL price

17 California vs. Northwest CFL Sales Annual California CFL sales are double Northwest sales Incentive CFL sales in California comprise a far greater proportion of total sales than in the Northwest – ULP incentive CFLs comprised 73% of total California CFL sales in 2007 – Incentive CFLs comprised 27% of Northwest CFL sales in 2007 NEEA incentive CFL sales comprised 11% of 2007 Northwest CFL sales * Awaiting final data on shipments within PG&E service territory. California Sources: (1) CFL Market Effects Final Interim Report, 2009; (2) IOU ULP tracking data. Northwest Source: Fluid Market Strategies, Q Widget CFL Sales Data Report. Prepared for NEEA. March 6, Estimated Incentive and Non-Incentive CFL Sales in California and the Northwest, 2007 Draft CA Data DO NOT CITE

18 California vs. Northwest CFL Retail Channels Non big box stores account for a greater proportion of overall CFL sales in California than in the Northwest – 44% in California versus 30% in Northwest Same applies to incentive CFL sales – 73% non big box in California, 33% in Northwest CA Source: CFL Market Effects Interim Report, Northwest Source: Fluid Market Strategies, California CFL Sales by Retail Channel, 2007 California ULP Shipments by Retail Channel, 2007 Northwest CFL Sales by Retail Channel, 2007 Northwest Promotional CFL Sales by Retail Channel, 2007

19 California vs. Northwest CFL Price CFL prices are lower in California than in the Northwest – Especially given that ULP CFL sales account for majority of total CA CFL sales CA Source : Preliminary Results from the 2008 California Lighting Retailer Shelf Inventory conducted by KEMA, Inc. as part of the Impact Analysis of the CA IOUs Residential Retrofit Programs. DATA IS PRELIMINARY AND UNWEIGHTED AND SHOULD NOT BE CITED IN OTHER CONTEXTS. NW Source: KEMA, CFL Tracking Study Draft Report. Prepared for NEEA. Average California and Northwest CFL Prices by Style, 2008 Draft CA Data DO NOT CITE

20 Summary: California vs. Northwest Broadly, California and Northwest have utilized similar incentive strategies – However, there are key differences between the California and the Northwest Incentive sales comprise a much larger proportion of total CFL sales in California than in Northwest California incentives provide greater support to non big box channels in California than in the Northwest CFL prices in California are considerably lower than in the Northwest No noteworthy changes Northwest CFL market after NEEA withdrew incentives in early 2008 – Other entities provided CFL incentives instead – Incentives shifted toward specialty lamps

21 Connecticut Department of Public Utility Control (DPUC) has directed CT utilities to: – Scale back incentives for common (basic bare spiral) CFLs – Shift incentives toward specialty bulbs – Increase promotion of CFLs in retail outlets where sales trail those of big box retailers Pay special attention to grocery and drug stores – Eliminate upstream incentives for common CFLs by 2010 Source: Decision: State of Connecticut Department of Public Utility Control Docket No DPUC Review of the Connecticut Light and Power Companys and the United Illuminating Companys Conservation and Load Management for the Year Pages May 7, 2009.

Thank you for your attention. Jenna Canseco Senior Consultant KEMA, Inc x44121