Automatic Refrigerant Leak Detection Solutions Market Assessment

The market study conducted during this project addresses a fundamental barrier preventing California Investor-Owned Utilities (“IOUs”) from integrating Automated Leak Detection (“ALD”) solutions into energy efficiency portfolios: the lack of standardized, independent evidence demonstrating the energy and operational benefits of commercially available ALD technologies. While grocery retailers have increasingly adopted ALD to improve safety, regulatory compliance, and equipment reliability, utilities currently lack the technical basis needed to evaluate these solutions as cost-effective energy efficiency measures. As a result, no defensible pathway exists for developing utility incentives despite growing claims that ALD can improve system performance, reduce operating costs, and deliver persistent energy savings.Those claims are becoming increasingly important as the ALD market evolves. Traditional leak detection has relied on fixed gas sensors ("sniffers") and manual inspections. Today, a growing number of direct, indirect, and hybrid ALD platforms combine connected hardware sensors, continuous refrigeration telemetry, cloud-based analytics, and, in some cases, artificial intelligence (“AI”), machine learning (“ML”), and advanced fault detection and diagnostics (“FDD”) to identify refrigerant leaks, detect performance degradation, forecast equipment failures, and diagnose root causes before traditional alarms are triggered. These technologies promise to improve energy performance, reduce operating costs, and extend equipment life, but the claims have not been evaluated using standardized, utility-grade methodologies. Without that independent evidence, utilities cannot confidently assess cost-effectiveness or justify incentive programs.The central hypothesis of this project is that ALD should be evaluated as an operational optimization technology rather than simply a leak detection or compliance tool. Similar to advanced controls, smart thermostats, Energy Management Systems (“EMS”), and retro-commissioning (“RCx”), ALD does not directly create energy savings; it identifies refrigerant leaks that leave systems undercharged, forcing compressors to run longer, cycle more frequently, and consume excess electricity. Correcting these hidden operational deficiencies restores system performance, reduces operating costs, and delivers persistent energy savings. If these benefits can be independently validated, ALD represents a new opportunity for utilities to capture cost-effective energy savings while also supporting broader Total System Benefits (“TSB”) through avoided refrigerant emissions, improved reliability, and longer equipment life.To test this hypothesis, the project will conduct a comprehensive assessment of commercially available direct, indirect, and hybrid ALD solutions. It will evaluate technology capabilities, implementation requirements, lifecycle costs, customer applicability, and vendor performance claims while identifying where existing evidence is sufficient and where additional field validation is needed.  Performance claims include avoiding loss in performance efficiencies from proper refrigerant leak monitoring.  Because large Hydrofluorocarbon (“HFC”) refrigeration systems (>1,500 lbs.) are already required to install ALD under the California Air Resources Board (“CARB”) Refrigerant Management Program (“RMP”), the assessment will focus on determining where utility programs can provide additional value beyond existing regulatory requirements. This includes evaluating opportunities across under-regulated HFC systems, natural refrigerant systems, and identifying technical principles that may support future application of ALD technologies within complex commercial heating, ventilation, air conditioning (“HVAC”) systems as these solutions continue to mature.The outcome will be a practical roadmap for utility program development. The project will identify the technical evidence, Measurement & Verification (“M&V”) requirements, and remaining research gaps needed to support future field validation, measure development, and program design. It will also identify where targeted utility incentives can deliver the greatest value, particularly for small and medium-sized food retailers operating older, leak-prone refrigeration systems, including Hard-to-Reach (“HTR”) customers and Disadvantaged Communities (“DACs"), where upfront capital has historically limited adoption despite significant opportunities for energy savings. Ultimately, by establishing an independent technical basis for evaluating ALD, the project will help ensure ratepayer investments are directed toward the technologies and customer segments where they can deliver the greatest verified and most cost-effective benefits.This work builds directly on Southern California Edison's (“SCE”), Emerging Technologies Project Number ET18SCE7080 , which concluded that California must significantly reduce refrigerant leakage to achieve the climate objectives established under “SB 1383” and “SB 32”. As such, by validating the energy and operational benefits of ALD as an operational optimization measure, the project will help establish a practical pathway for integrating these technologies into utility portfolios while also supporting California's goal of reducing hydrofluorocarbon emissions by 40% by 2030. In doing so, it directly advances California emerging technology program (“CalNEXT's”) Technology Priority Maps (“TPMs”) for lifecycle refrigerant management, leak detection and monitoring, process load optimization, and creates a technical foundation that can inform future evaluation of ALD applications within commercial HVAC systems.