As the largest generational cohort in the history of the U.S. inches closer to paying their own electric bills, utilities have a novel chance to reinvent themselves. If they can’t, the millennial generation is more likely than any other age group to take their energy business elsewhere without a second thought.
More than half of millennials are likely to sign up forsolarpanels in the next five years, compared to 18 percent of baby boomers, according to new data from Accenture.
Members of the millennial generation are not just glued to their phones for Pokemon GO and Snapchat, but also for daily tasks like banking, and ideally, energy management. More than half are interested in smart home technology and are willing to pay for it, according to the Accenture survey. Nearly 80 percent of those in the age group 18 to 34 would like to be able to log in to their energy provider’s website the way they log in to nearly every other website they use: with social media credentials.
Younger consumers are already leading a shift toward LEDs at the expense of CFLs, according to a new survey from Sylvania, but that is just the tip of the iceberg. Accenture found that 87 percent of millennials globally are likely to consider distributed energy resource products and services after receiving information about them.
The eagerness to embrace technology and clean energy gives utilities an opportunity to sell new services to a massive consumer group, whether that's a product sold through utility online marketplaces or community solar.
The utility industry has seen an uptick in customer satisfaction in recent years, according to J.D. Power, but that is largely driven by a lack of big power outages. The industry is still woefully behind nearly every other industry J.D. Power tracks, including car insurance, banking and airlines. For example, only 11 of 137 utility brands studied outperformed the airline industry average.
Utilities desperately need to catch up, but they may only have one chance to get it right with many millennials. More than 80 percent would be hesitant to sign up for additional products and services if their energy provider could not provide a seamless experience. More importantly, 95 percent of millennials said they’d switch energy providers altogether if their energy provider couldn’t provide a seamless experience.
“Energy providers must take these and other insights about these groups to heart, to unlock value, because consumers’ preferences and behaviors are rapidly changing the market landscape,” Tony Masella, managing director of Accenture Energy Consumer Services, said in a statement. “Customer strategies must take a broad view of the trends shaping today’s consumers, and more importantly, the consumers of tomorrow.”
There are faint glimmers of shifting strategies in the U.S. Tendril recently launched a mobile app that takes a nod from the banking and airline industries and has functionality not usually seen in the utility world. Duke Energy and some subsidiaries of American Electric Power are market-testing it now. Tendril says the app currently does not allow for social sign-on, but it is a feature that can easily be added if a utility asked for it.
Before he was ousted, former NRG CEO David Crane noted that the energy industry “chronically ignores” millennials, a demographic he hoped to woo with new product offerings through NRG Home. But with Crane gone, NRG Home, and its millennial ambitions, has an uncertain future to say the least.
For energy providers that are willing and able to experiment, and do it fast, they’ll find an eager test bed in the millennial generation. Nearly one-quarter of millennials said they want to test new energy technologies.
Of course, many utilities would argue there is no need to rush to embrace tech-savvy millennials, since so many still live at home. But when they finally move out the basement, beware -- as they may just see the incumbent utility as nothing but olds.