This Navigant report by Kevin Cooney, Marshall Keneipp, Justin Spencer, and Chris Newton examines the driving factors that influence the performance of residential heating, ventilation, and air conditioning (HVAC) efficiency programs in the desert southwest. The authors conducted primary field data collection in Phoenix, AZ and Palm Desert, CA in the course of evaluating existing energy efficiency programs. These programs covered a range of measures, including: high efficiency new equipment, early retirement of air conditioning equipment, and equipment sizing for new construction. The resulting studies show that residential HVAC energy efficiency programs need to be designed carefully in order to ensure maximum return on investment. In general, high efficiency equipment retrofits produced lower savings than expected, while early retirement and proper system sizing appear to offer significant benefits. The program design principles presented here can be applied directly to other residential programs in hot, dry climates and can be modified and applied to other regions with high cooling loads. (The report was presented at the International Energy Program Evaluation Conference in Paris, France.)