Report: Aggregators and Customers Highly Satisfied With an Open Market Approach to Demand Flexibility

June 21, 2024

A recent report demonstrated high levels of support among customers and market aggregators for a new delivery model for demand flexibility.  

California's statewide Market Access Program (MAP), which utilizes an open-market program design, posted satisfaction rates of 98 percent of residential and 92 percent of non-residential respondents. A majority of respondents across all survey segments would recommend the program to others and be willing to participate in a similar program in the future, according to a recent study conducted by the energy research and consulting firm Opinion Dynamics. 

Modeled after the FLEXmarket approach pioneered by Recurve and MCE, MAP implements a market-based, pay-for-performance model that rewards market aggregators for projects that deliver hourly impacts measured at the meter.

Powered by Recurve's industry-leading data platform and open-source advanced measurement and verification (M&V), FLEXmarkets are designed to reduce overhead, simplify and expedite project enrollment, and expand the range of business models and technologies available to customers. 

Utilities and program administrators drive results through a price signal that aligns with grid, climate, carbon, equity, or other program goals. This non-prescriptive approach frees aggregators to find and develop projects that deliver the greatest grid and customer benefit. Because utilities pay only for delivered impacts, FLEXmarkets are cost-effective by design. 

Recurve led two of the four CPUC-approved market access programs (MCE and PG&E) for 2022 and 2023, and several other FLEXmarkets for Regional Energy Networks and Community Choice Aggregators.

Because they pay for hourly savings measured at the meter, pay-for-performance markets can both simplify program administration and make demand flexibility more lucrative for providers and more affordable for customers. Rigorous, advanced measurement gives utilities confidence that measures are delivering savings at the most valuable times, allowing them to deploy reliable virtual power plants equivalent to supply-side resources.   

The popularity of MAP is a testament to the ability of non-prescriptive performance-based demand flexibility to drive innovation and deliver results for customers, the climate, and the grid. 

Open-Market and Market Access Program Background

In 2021, California issued an emergency proclamation to expedite clean energy projects and relieve pressure on the electrical grid during extreme weather events. 

In response to this proclamation, the California Public Utilities Commission (CPUC) created a statewide "Market Access Program" (MAP) to promote energy efficiency and demand flexibility projects that reduced summer peak demand and improved grid reliability. 

After only a year and a half in operation, Recurve's California Market Access Programs were delivering more than double the benefit of the average commercial efficiency program per unit of energy saved. Recurve's MAPs alone added 38% to the total system benefit (TSB) of the entire commercial energy efficiency portfolio in the state. TSB is a dollar value expression "of the lifecycle, energy, capacity, and GHG benefits of a utility's energy efficiency program portfolio."

In contrast to many traditional deemed energy efficiency programs which often have low realization rates, projects enrolled in Recurve's MAPs consistently delivered 100 percent or more of predicted savings.  

Opinion Dynamics Process Evaluation Shows Aggregator and Customer Satisfaction

Source: Opinion Dynamics, 2024, California Statewide Market Access Evaluation Process Report (Public Draft), p 38.

To further assess the success of Market Access statewide, the CPUC engaged Opinion Dynamics to conduct a process evaluation of the program. The study’s objective was to characterize participation in the market access program, assess how well program design delivered on the goals of flexibility, simplification, and scale, and identify opportunities for improvement. 

The draft report found that "overall, the program is well-liked, as indicated by high levels of satisfaction," and that both "interviewed aggregators and surveyed customers were highly satisfied and would be willing to participate in a similar program in the future." 

Both aggregators and customers overwhelmingly said that they would recommend the program to others. Furthermore, the report concludes that “market acceptance for the pay-for-performance model exists."

According to the report:

"In general, aggregators were enthusiastic about the MAP design. Most aggregators preferred the MAP approach to those of traditional prescriptive/deemed rebate programs and custom programs. Most aggregators expressed that the flexibility in choosing equipment, incentives based on measured--not estimated--savings, and the basic program structure allowed them to offer better customer solutions than prescriptive programs. Many also appreciated the streamlined measurement approach to savings over what they consider an overly cumbersome custom program process." 

One aggregator expressed that “having to be responsible for performance really changes the game in a good way“ while another noted that they were delivering much greater savings value than historically with other efficiency programs. The MAP structure also allowed aggregators to implement measures that would not be offered through traditional efficiency programs, such as lighting.  

Of the four implementers, “aggregators expressed that Recurve provided the most accessibility and transparency in the saving calculations,” and “one aggregator noted the ease of the eligibility process through Recurve.” 

Of the four implementers, “aggregators expressed that Recurve provided the most accessibility and transparency in the saving calculations,” and “one aggregator noted the ease of the eligibility process through Recurve.”  (Opinion Dynamics, 2024, p. 36)

Customers were also largely satisfied with the program, with 98% of residential and 95% of non-residential respondents finding that completing paperwork and documentation for the program was “somewhat or extremely easy.” 

Customer satisfaction with aggregators was also high, with “at least 90% of respondents across the three surveys [reporting] being somewhat or completely satisfied.”  

Challenges and Opportunities

According to the report, the "key barriers to fully achieving the MAP's principles were the short ramp-up time from program concept to programs start, limited program years (2022-2023), and individual difference in program design."

Because it was developed in response to an emergency proclamation, MAP was implemented on an urgent basis. Aggregators pursued projects that could be installed quickly and easily and that they knew would drive significant peak savings. 

Commercial lighting retrofits, for example, offered an opportunity to implement a lucrative measure that provided outsized savings and could be offered at very low cost to customers. Customers expressed satisfaction in the improved quality of the lighting.

As the study points out, this is an example of MAP's flexibility, as aggregators were able to identify a market need and quickly respond. However, the urgency of implementation also "contributed to generally homogenous projects that left some customer needs unmet, particularly in the residential sector." Specifically, the report said, a number of residential survey respondents "indicated that there were other energy-saving upgrades they wanted to have done that were not included in the MAP project." This was noted as an opportunity for innovation with a longer time horizon and focus on deeper savings.

The urgency around program implementation may also have contributed to the relative success of MAP with non-residential customers versus residential customers. According to the study, "aggregators discussed less risk and larger payouts with the [non-residential] sector." Program administrators "reported that finding aggregators for the residential sector was challenging ... for the program to be worth their investment of time, resources, and funds, aggregators would need to recruit large numbers of residential customers to participate," which was difficult given the short timeline to implementation.

To address these and other challenges, the report offered several recommendations, including making a greater effort to identify and enroll a more diverse set of aggregators who are equipped to pursue different types of projects and recruiting more original equipment manufacturers (OEMs) to achieve scale in the residential sector.

Additional recommendations included following a more uniform program design across different program administrators and considering data-sharing practices across administrators.


Given the challenges of rapid implementation, MAP's early success is remarkable. 

The Opinion Dynamics report demonstrates that in addition to driving tangible results for the grid, both market aggregators and customers see the many benefits of performance-based demand flexibility markets. 

As the market develops, a greater diversity of business models and technologies will emerge as aggregators take advantage of the flexibility of market access to refine their approaches and find opportunities for savings that benefit a wider range of customers. 

As the prototype for the market access model, Recurve's FLEXmarket platform enables a scalable approach that can be deployed in many contexts for utilities or state agencies that want to deploy measured efficiency and flexibility as a reliable demand-side resource.

Reach out to Recurve to discuss your program needs today.

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