Customer needs point way to utilities’ future

In a serendipitous case of cyber call and response, an energy industry blog recently posed a question that should be nagging all power providers, and another offered an answer that could give utilities hope.

At the Solar Electric Power Association’s Utility Solar Conference in May, Energy Efficiency Consultant Suzanne Shelton posted an essay titled “So why do I need my utility, exactly?”Redirecting to a non-government site Discussions among conference attendees about how best to build, integrate and price solar power seemed to leave the customer’s wishes entirely out of the equation. Coming on the heels of SolarCity/Tesla unveiling its Powerwall battery storage system, that approach struck Shelton as dangerously short-sighted. She conjectured that solar panel/battery storage combinations could become efficient and affordable enough in as little as five years to lead utility customers to ask themselves the question of her title.

Just two weeks later, “Listening for what matters to residential utility customers” Redirecting to a non-government site appeared in Intelligent Utility. The article focused on motivating customers to make energy-efficiency upgrades, but its underlying theme applies equally to the threat of grid defection. To get a customer to replace an inefficient furnace or stay connected to the grid, you must listen to their concerns and offer solutions that address their needs.

Doing business in brave new world
Broadcast television and landline phones tied to homes and offices were once life-changing services that quickly became viewed as necessities. For the most part, people were satisfied with those services and trusted the few—sometimes, sole—providers. Although utilities still enjoy that kind of marketplace (for now), consumers live in a world that offers myriad options and custom plans for other services, and they are starting to cast a skeptical eye toward their power providers.

A Shelton Group study found that 55 percent of consumers are less than satisfied with their utility, and would be open to other options. Tesla is only one of the private companies working on creating those options, and there are plenty of innovators in the energy-efficiency sector, too. It would take only a couple of breakthroughs to turn the much-discussed “utility death spiral” from a distant cloud on the horizon to a looming thunderhead.

The good news is that utilities still have time to get in front of the change curve. Both articles were optimistic about the new business opportunities awaiting utilities that are ready to look beyond the status quo of selling kilowatt-hours (kWh).

New model built on listening
Instead of seeing new technologies that save or generate energy as competition, utilities might consider how these systems meet customers’ specific needs. The IntelligentUtility article offers insight on how to talk to residential customers about saving energy, drawn from a poll by energy and sustainability marketing firm KSVRedirecting to a non-government site Researchers found that different demographics have different motives for making home improvements, a point Shelton frequently makes. Whether it is saving money, controlling home systems, freedom from time-of-use rates or something else, the utility of the future may be one that designs and markets customized equipment and service packages that speak to customers’ values.

All the points in the article are worth taking time to read, but Point 5, where researchers asked people where they get advice on home improvements, has particular resonance. Only 1 percent turned to their electric utility company, and this is where Shelton sees the greatest opportunity.

Despite sometimes bumpy relations with their power providers, people are still confident that when they flip the switch, the light will come on and when they open the refrigerator, the food will be cold. She suggests that by combining their established reputation for reliability with a new menu of customized products and programs, utilities will be able to keep customers even when leaving the grid becomes easier.

According to KSV, listening for what matters among utility customers is the best way to figure out how to connect homeowners with the right messages to get them to make efficiency upgrades. It is also the key to building the trust necessary to long-term customer loyalty, something no technology can duplicate or replace.

Source: Shelton Insights, 5/5/15; IntelligentUtility, 5/18/15