It’s all about energy consumers — that is, you and me — at Monday’s Smart Energy International conference in San Francisco. First we had an industry-backed look at how utilities view the challenges of connecting customers to the smart grid. Now comes J.D. Power and Associates, which has polled 38,000 U.S. utility customers to try and figure out how they might want their smart grid served.
J.D. Power has split those customers into six different categories with names like innovators, automators and the dreaded “indifferent” segment. Each has different motivating principles, whether tracking their energy, focusing on the bills, or having their rewards put in the form of points redeemable for cash or merchandise.
Importantly, the survey went beyond asking people how they perceive green energy, and asked them what actual behaviors they would be willing to change or adopt to save energy. It also drills down past the small but loud group of utility customers who fear their smart meters are causing illness, and finds that most customers are most concerned about a fair and accurate bill.
It’s the kind of basic market research you’d expect a fledgling consumer technology company to do before it even started dreaming up products. Yet, according to the latest findings from the Smart Grid Consumer Collaborative, only a handful of U.S. utilities are trying out segmented marketing in any organized way.
What gives? Well, most of the world’s quasi-monopolistic utilities haven’t seen much reason to spend money or develop expertise in marketing electricity, gas or water to customers, since everyone is pretty much forced to buy as much as they need. Getting people to save energy actually hurts most utilities’ bottom lines — what business wants to sell less product? While many utilities have moved to decoupling, rate-basing and other financial models that encourage energy efficiency, others market their programs grudgingly under government mandate.
Consumer marketing just isn’t a utility’s strong point. But smart meters are forcing them to talk to their customers, or face backlash to problems both real and imagined. We’ve seen how Pacific Gas & Electric has suffered from customer missteps in its smart meter rollout — and how utilities like San Diego Gas & Electric have largely avoided them, to name two examples.
Smart meters are only beginning to be turned on for customer use in any significant way, so much of the market research utilities need to do will rely on old-fashioned mailers and phone calls. But as smart meters start connecting to homes in the millions, users will want to graduate from Web sites that give them day-late household-wide energy use figures to something that can actually help them save money — say, a dashboard or Web interface that lets you set a cap on how much you’ll spend that day or that month, and then organize household energy use to meet it.
While many in the industry see such consumer-facing innovations as the next frontier for energy saving, not all smart grid players place such a high store on segmented customer marketing to get there. After all, most surveys show that the majority of power users care about nothing more than reducing their bills — and they aren’t willing to change many behaviors to do it. Most traditional utility energy savings programs see opt-in rates in the mid-single-digit percent range, leaving a large market of captured customers out of the game.
That’s led some utilities to take a blanket approach to their energy-efficiency marketing. OPower, for one, has relied on behavioral science to get broad groups of utility customers to save energy overall and at peak power times via mass messaging, albeit at small levels of penetration of about 2-4 percent.
Even so, recognizing the power that automation can deliver, OPower is also working on integrating its software with Honeywell’s smart thermostats. Home energy startups like Tendril and EnergyHub say their in-home dashboard or display model lead to 10 to 15 percent energy efficiency gains. Silver Spring Networks and Energate have helped Oklahoma Gas & Electric gain 33-percent energy savings in a pilot involving automated thermostats and pre-set variable rates to discourage energy waste on the hottest hours of last summer, and are planning a commercial-scale rollout next year.
But beyond the world of smart meters, there’s a lot the utility world could learn from today’s mega-successes in the social media space. OPower and Facebook plan to launch an energy efficiency app next year that could instantly start collecting the kind of data J.D. Power spent all year putting together, only in the millions of customers.