Rethinking the pilot: A new path to utility innovation
Discover how traditional pilot frameworks are showing their strain and what utilities can do to modernize their approach for faster, more cost-effective program innovation.
Across the U.S., utility program managers and decision makers are confronting a familiar tension: the need to introduce new programs and tactics that support customer needs and system performance, while ensuring that every dollar spent is transparent, delivers clear value to customers, and can withstand regulatory scrutiny. Pilot programs have long served as the bridge between innovation and regulatory confidence. But the traditional model was built for an era with fewer emerging technologies, slower market cycles, and less acute affordability and access concerns. Today, that model is showing its strain.
This article explores why traditional pilot frameworks are no longer keeping pace, the principles utilities can rely on to modernize their approach, and what this looks like in practice—using recent program examples that demonstrate a faster, more cost‑effective way to innovate.
Traditional pilot frameworks no longer match today’s demands
For decades, pilot programs were designed to test new approaches thoroughly before scaling. This process gave commissions confidence that ratepayer dollars were being invested responsibly, and they helped utilities build portfolios grounded in proven outcomes.
But utilities are now operating under fundamentally different conditions. The volume of programs requiring validation has surged. Technology players enter the market faster and evolve more quickly than regulatory frameworks can accommodate. Customer needs are shifting rapidly. And, critically, the pressure to reduce energy burden, improve cost savings, and extend program benefits to underserved customers has become a central concern for both regulators and the public. These pressures are converging at the exact moment when traditional pilot models—with multiyear timelines, high administrative overhead, and limited flexibility—are least able to adapt.
Why change is needed: Cost, timeline, and flexibility
Cost: Creating room for pilots—and using them wisely
The cost challenge with pilots is less about overspending and more about underinvesting. While pilots are a proven path to smarter program investment, most regulatory frameworks do not provide discretionary funding for pilots separate from their portfolios. Because of this, utilities face pressure to treat every dollar spent on pilots as if it were a part of a scaled program, which discourages experimentation and limits the volume of ideas that get tested.
And when pilot resources are committed, how they’re evaluated matters. Many current approaches mirror the robust evaluation, measurement, and verification (EM&V) structures designed for full-scale demand-side management (DSM) programs: comprehensive measurement, extensive regulatory documentation, and expert analysis calibrated for established programs.
Rigorous evaluation makes sense once a program is mature, but it’s unnecessary when evaluating pilots where the real question is whether an idea can be cost-effective when scaled. Using the wrong level of rigor too soon increases costs without improving decisions and reduces resources available for additional testing. The goal isn’t less rigor, it’s using the right metrics to answer the right question.
Further, utilities and regulators may feel obligated to carry a pilot through completion even when early findings suggest it won’t be cost‑effective as a permanent program. This is because pilots are often filed without off-ramps, making it hard to shorten or stop work and to redeploy unspent funds to higher‑value ideas. The goal should not be to complete a pilot, but rather, to learn quickly and accelerate or terminate pilots where it makes sense.
Timeline: Innovation that lags
Traditional pilots often take years to progress from concept to launch to evaluation—a timeline marked by bureaucracy and competing priorities. In a period defined by rapid technological evolution, this pace carries real consequences. By the time results are analyzed, the technologies, customer behaviors, or market conditions the pilot was created to assess may have shifted. A solution that looked promising at the outset may be obsolete by the time it’s ready to scale—or, worse, a market opportunity may have closed entirely.
Additionally, when customers are ready for a new technology such as heat pumps, flexible load solutions, or smart home technologies today, a multiyear pilot process can undermine both customer value and portfolio impact by delaying deployment.
Flexibility: Limited ability to adapt mid-course
Current frameworks typically lock program designs early and make mid‑course adjustments difficult. But early learnings are often the most valuable and the most indicative of whether a solution is performing as expected. Without structured flexibility, utilities risk spending money evaluating an approach that no longer matches customer needs or market conditions.
These three issues—cost, pace, and rigidity—create a system-level problem. Yet they also point to a system-level solution.
5 principles for a better approach: Faster learning, lower cost, same credibility
Pilots should be considered not as one-off experiments, but as a deliberate pathway to scale. While many pilots struggle, those evaluated using the right methodology are far more likely to transition into permanent, funded programs. Several core principles define a more modern approach that allows utilities to test and scale programs faster without sacrificing credibility.
1. Start smaller, learn faster
Pilots should be designed to answer a narrow, essential question quickly—not to prove everything at once. Smaller initial scope preserves rigor while reducing cost and accelerating learning.
2. Separate rigor from bureaucracy
Regulatory confidence comes from strong methodology, not the amount of documentation and process. Utilities can maintain appropriate EM&V without replicating comprehensive program evaluation processes for every pilot.
3. Build for replication
Rather than bespoke one‑offs, pilots implemented through a repeatable structured process can transfer knowledge, accelerate future deployments, and create compounding value across portfolios and the industry.
4. Design for adaptability
Frameworks should allow for structured mid‑course adjustments based on early learnings. Flexibility strengthens outcomes by enabling utilities to respond to real conditions instead of static assumptions.
5. Use real‑time data to accelerate or exit
Real‑time performance metrics allow utilities to make timely, objective decisions about whether an idea is gaining traction, stalling, or underperforming. Just as important: a pilot that disproves a hypothesis is not a failure. It is proof that the framework works because it allows utilities to exit quickly rather than invest ratepayer funds in programs unlikely to deliver savings.
Principles in action
Recent utility initiatives illustrate how these principles translate into real-world results.
Pilot: A midstream model for certified energy‑efficient new manufactured homes
Manufactured homes represent the largest source of unsubsidized affordable housing in the U.S. yet have been historically underserved by traditional residential utility programs, leaving a gap where affordability and equity intersect.
To address this gap, ICF’s Innovation Incubator team developed and piloted a replicable incentive program to deliver efficiency incentives in the manufactured housing market for a Midwest utility.
Before launching, ICF conducted a value chain analysis to determine where incentives would be most impactful. Upstream incentives to manufacturers tend to produce low volume without driving consumer demand, while downstream incentives to customers introduce financing complexity that most utilities are reluctant to take on. The midstream approach, meanwhile, targets retailers and community management companies—the players most influential in purchasing decisions. This proved the most successful path, creating demand for high-efficiency, better quality homes.
The pilot evaluated multiple efficiency packages against the Manufactured Home Construction and Safety Standards (commonly referred to as the “HUD Code”), which differs from site-built residential energy codes. Incentives were offered to midstream participants on qualifying ENERGY STAR and DOE Efficient New Homes (formerly known as Zero Energy Ready Homes).
The program used a phased, agile approach, working closely with EM&V contractors to refine design, minimize risk, and improve participant experience over time. Since launching in mid-2023, the pilot has evolved through structured phases, leveraging local champions across the value chain to optimize targeting, incentives, and market engagement.
By 2024, the program model was successfully replicated by utilities in New Mexico and Michigan. Ongoing evaluations included major stakeholder interviews, bill impact analysis, and refinements based on market feedback to improve scalability.
Results show high customer satisfaction with their homes and their utility bills. For utilities, the program is simple to operate, delivering substantial lifetime energy savings for the whole-home at viable program scale.
Since 2023, more than 1,800 homes have been completed through the program. In 2025 alone, New Mexico and Michigan programs delivered $760,000 in rebates for 1,100 homes—about 1% of the national new manufactured housing market.
This is an impressive feat for a nascent program that has proven effective across climate zones, fuel types, and underserved segments, including rural, income-qualified, and moderate-income customers.
The result: a program model now replicated and adapted across nine utility clients. Because the framework was designed for replication from the start, each new utility could adopt a proven, refined model and begin delivering incentives without having to build the framework from scratch.
Pilot: Agricultural efficiency programs
Agriculture is an often-overlooked market for utility DSM programs, one where organizational complexity, thin margins, and a fragmented supply chain have historically made it difficult to design programs that reach farmers and producers. Yet it represents a significant and growing opportunity for utilities looking to expand their efficiency portfolios into rural, underserved segments.
To help fill a gap and capture a new opportunity, ICF designed and piloted a new construction incentive within Dominion Energy South Carolina’s Agriculture program. The initiative targeted container farms: modular, controlled environment units built from standard 40-foot shipping containers. These farms support hydroponic crop production and vertical stacking for high space efficiency. No prescriptive measure had been developed anywhere for this technology, which meant that getting incentives to flow required building the framework from the ground up.
ICF’s initial incentive design focused on lighting and controls, with ongoing research into additional savings from dehumidification, HVAC, and water systems. The first project was for the South Carolina Department of Corrections, joined by the South Carolina Department of Agriculture, to build a vertical farming facility and training program at Camille Griffin Graham Correctional Institution, a women’s prison located in Columbia, South Carolina.
Working with Dominion Energy South Carolina and local partner AmplifiedAG, ICF adapted existing technical reference manuals to develop savings calculations for lighting and controls, then routed the project through Dominion Energy South Carolina’s commercial custom and prescriptive programs, creating a pathway that satisfied regulatory requirements while feeling like a simple process for the customer. The collaboration marked the first time a utility program provided incentives for container farms in the country, setting a precedent for future initiatives.
The pilot’s initial phase included six containers, each projecting 95,000 kWh in first year energy savings.
Because container farms are self-contained units, the savings calculations are highly portable—not meaningfully dependent on geography or climate—making the model well-suited for replication across utility territories and regions.
Beyond energy savings, the program opens new possibilities for how utilities engage with their communities. At Camille Griffin Graham Correctional Institution, this modern agricultural operation will provide incarcerated individuals with real-world experience and career training in the fields of vertical farming and agricultural technology.
A better model built to serve customers
Innovation and affordability are not competing priorities. With the right framework, they reinforce each other—and extend to customers and communities that traditional programs have not reached, including rural markets and underserved housing segments. A modern pilot approach allows utilities to validate what works faster, stop what doesn’t work sooner, and scale what delivers customer and system value.
ICF’s Innovation Incubator was built around these exact principles: a structured, eight stage process that moves programs from concept to scaled deployment in 12-18 months, with over 142 completed pilots and more than 90 inflight initiatives that span energy efficiency, load management, and customer engagement.
For utilities preparing for upcoming planning cycles, the question is no longer whether a faster, more cost-efficient pilot model exists. It does, and it’s already proving its value at scale.