Will making customer rebates more convenient transform the energy landscape? Simple Energy thinks so.

For the past few years, the Boulder-based startup has been developing and deploying utility-branded marketplaces equipped with instant rebates, which allow customers to apply for an incentive at the point of purchase. This week, Simple Energy announced it’s opening up its API so that customers can also instantly validate and redeem rebates in third-party marketplaces. 

At launch, the platform is available to more than 15 million customers in a half-dozen states in partnership with 10 utilities and several leading retailers, including Lowe's, Nest, ecobee and ABT.com -- with additional retailers to be announced later in the year. Simple Energy claims its new Rebates-as-a-Service (RaaS) platform is the first to bring instant rebates to every place utility customers purchase energy products and services, both online and in brick-and-mortar stores.

Typically, when customers want to apply a rebate on an inexpensive item like light bulbs, a retailer can offer the incentive upfront and be repaid on the back end by the utility. But for more expensive items, like thermostats and water heaters, customers have to purchase their product for full price, then mail in paper forms, along with their receipt, in order to have a gift card or a check sent back weeks later. Other marketplace companies streamline this process by allowing customers to email their receipts to the utility. Simple Energy CEO Yoav Lurie says his company’s solution is even more convenient, making utility efficiency programs far more successful as a result. 

“We think a totally different way of doing it is inserting the rebate into the transaction itself, because it takes all of the risk away from the customer,” he said.

People are inherently risk-averse and therefore far less likely to complete the rebate application process if they think they’re ineligible or will get rejected. American utilities spend some $4 billion on rebates and incentives each year in an attempt to try to change how their customers use energy. The rebates-as-a-service concept allows customers to see instant savings on energy-efficient products at the point of sale, which increases transaction volumes, reduces program costs, and helps utilities meet their energy efficiency and customer engagement goals.

Simple Energy currently provides energy marketplaces equipped with instant rebates for utilities of various types and sizes, including Commonwealth Edison, Georgia Power and Sacramento Municipal Utility District. The problem with these utility-branded platforms is that they’re a new destination. Customers have to know they exist and decide to do their shopping there. So what about the customer buying a hot water heater at a Lowe’s store? The rebates-as-a-service platform brings the incentives to them.

At Lowe’s stores in Simple Energy’s home state of Colorado, customers can enter their home address and email into a rebate website advertised in-store to find out immediately if they’re eligible for an incentive -- no utility account number necessary. The customer then gets a unique bar code that they can use to trigger the rebate at check out.

Through Lowes.com and other participating online retailers, the rebate automatically pops up in a customer’s shopping cart, verified via email and applied at checkout. While testing out the rebates-as-a-service model, ComEd met 5 percent of its smart thermostat sales target for 2017 in just a couple of months through Nest.com alone.

The concept of instant rebates may seem almost so simple that it’s mundane, but Lurie argues it will play a meaningful role in facilitating customer adoption of distributed energy resources (DERs). “We care about creating a more sustainable future, and if we want to do that, we need to empower customers at the grid edge to take advantage of offerings and make that step [to purchase] more efficient devices and DERs,” he said.

For Xcel Energy Colorado, the new rebates-as-a-service platform has been a “game-changer,” said Carolyn Elam, residential product portfolio manager at Xcel. Over five weeks of deployment, the utility saw three times as many transactions go through for evaporative coolers than in previous months, when customers had to mail in paperwork to claim rebates. 

“We have rebates for some products that are fairly substantial in value, and most of our customers have to front that money and wait for a rebate check, which can sometimes hinder their ability to make the best purchasing decision possible for their energy needs,” Elam said.

The $300 and $700 rebates Xcel offers help to bring down the upfront cost of an evaporative cooler (which is well suited for use in Colorado’s dry climate) substantially. But many customers “really can’t afford to wait for the rebate,” Elam said. 

For Xcel, a big benefit of the rebates-as-a-service platform is that it “closes the data loop,” she added. By facilitating and recording rebate usage, the platform shows how well utility programs are performing and ensures that investment dollars are, in fact, going toward efficiency programs and that customers are actually benefiting from them. “Those are all part of our reporting requirements,” said Elam.

Xcel Energy, like many other utilities, is also very focused on strengthening its relationships with customers and has been attempting to do that with traditional programs in place. But the way customers engage with products and services is changing, and utilities need to adapt to the e-commerce practices of today, while “making sure customers understand they’re getting the benefit from us, the utility, and helping them be as successful as possible with the products they’re purchasing,” said Elam.

Allowing rebate transactions to take place outside of the utility’s own website is uncomfortable for utilities, “because they don’t have full control,” said Lurie. But, ultimately, it’s enhancing the utility’s role in a transaction it wasn't part of before. Online tools can also help utilities expand into new business areas -- moving from smart thermostats, HVACs and lightbulbs to solar systems and inverters.

By the end of the year, Simple Energy will launch its rebates-as-a-service platform with contractors, so that customers can benefit from utility rebates at the point of installation, in addition to in stores and online. Next, the startup plans to bring instant rebates to utilities offering incentives for home solar.

“A lot of utilities don’t try to get regulation that’s supportive of engaging customers because they want regulation to do what they think they will be good at,” said Lurie. “We’re changing what utilities are good at.”


For more information, see GTM Research's new report on the emergence of utility-branded marketplaces.