The DistribuTECH smart grid showcase gets underway in San Diego this week, and one of the top questions on the minds of utilities, smart grid vendors and entrepreneurs will likely be, just when will utility customers start caring about the smart grid?
The Smart Grid Consumer Collaborative (SGCC) has been studying that question for years now, working with utilities around the country to gauge just what their residential customers think of smart meters, home area network devices, demand response and home efficiency programs and other smart grid-enabled ways to interact with their energy use.
On Monday, SGCC released its 2013 State of the Smart Grid Consumer report, which collects and cross-references the nonprofit research group’s findings from the past year. Along with a slew of data from utilities like San Diego Gas & Electric, Oklahoma Gas & Electric, CenterPoint Energy and Southern California Edison, the report dives into some more detail on general trends SGCC has been reporting on over the course of 2012.
We’ll be covering the SGCC’s symposium this morning, with updates on report findings and case studies, as well as some consumer education award winners to be announced. (SGCC is also supporting Greentech Media's The Networked Grid 2013 conference in March). In the meantime, here are some key takeaways:
Consumer awareness lags. It will be no surprise to students of SGCC’s work that most utility residential customers don’t even know what the smart grid is, let alone have a sense of how they relate to it. Specifically, 54 percent of customers polled say they’ve never heard the term "smart grid," while another 21 percent have heard the term but don’t know much about what it means. Only 17 percent report a basic understanding of the smart grid, while 7 percent say that they have a complete understanding.
Segmentation matters. Customers want different things from their utility, and that means that utilities have to start thinking of them as actual customers, rather than as one amorphous mass of “ratepayers.” Specifically, SGCC has broken out the U.S. energy consuming public into five segments -- Concerned Greens, Young America, Easy Street, DIY & Save, and Traditional -- and has taken a closer look at what makes each type of customer tick.
Concerned Greens, who make up about 31 percent of the residential electricity market, are the best targets for smart grid. They're protective of the environment and highly likely to participate in energy management programs. Other groups, like Young America, which makes up about one-quarter of the market, need more outreach and education to get involved, while “traditionals,” who make up about one-tenth of the market, are “set in their ways and don’t see the need for energy reform,” the report finds.
The importance of understanding income and its relation to smart grid acceptance. SGCC’s research has collected a good amount of information on what customers of various income levels think about the smart grid – and high income doesn’t necessarily translate into smart grid interest. For example, SGCC’s so-called Easy Street consumers, who make up 20 percent of the customer base, are the highest-income customers of any of its five segments -- but that means that they’re reluctant to change their lifestyles.
Low-income consumers, on the other hand, tend to know less about the smart grid at first, and have a less favorable view than higher-income groups. But they’re also eager to take advantage of money-saving capabilities once they’re introduced to them, which makes them an important target for utilities. Most utilities have special rate programs for low-income customers, which could serve as a channel to drive new smart grid-driven offers to that market.
Interest in utility programs depends on customer payback, involvement. SGCC has tracked different styles of connecting consumers to their utility, ranging from rebate programs to encourage them to turn down power use during critical peak demand moments, to real-time and prepay pricing plans. Not surprisingly, rebates were the most popular, with about three-fifths of consumers saying they’d sign up for “occasional” calls to reduce power in exchange for cash.
Time-variable pricing plans, which subject customers to daily fluctuations in rates, are less popular. About half of all customers said they’d be willing to try a time-of-use pricing plan involving one or two price changes per day, and only one-third said they’d be interested in real-time pricing, where rates can change more frequently. As for prepay, or pay-as-you-go, programs, only a quarter of customers said they’d be interested in paying in advance for power.