What Do Consumers Expect from Their Electric Utility and the Smart Grid?

April 1, 2016 By Nathan Shannon

Nathan Shannon

What do consumers expect from their electric utility? What programs and services are they likely to be interested in? And how can utilities earn their trust?

Each year the Smart Grid Consumer Collaborative (SGCC) releases its annual State of the Consumer Report. This report helps smart grid stakeholders gain a deeper understanding of how American consumers think about and engage with grid modernization efforts. The 2016 State of the Consumer Report provides a comprehensive analysis of key themes and data from both SGCC research conducted in 2015 and the Consumer Behavior Studies funded by the American Recovery and Reinvestment Act released by the US Department of Energy.

Based on the most recent information, SGCC has identified six key themes that reflect consumers’ view about the smart grid and benefits it can provide.

Theme 1: Consumers are Seeing the Benefits of the Smart Grid

Investments utilities have made in the smart grid are beginning to provide their customers the benefits of the technology—saving money, helping the environment, and improving grid reliability—that consumers say are most important to them. With more information on the timing and price of their usage, consumers using smart grid-enabled programs can save money.The smart grid also enables integration of greater amounts of renewable generation, giving consumers the opportunity to make more environmentally conscious choices. Finally, the smart grid is reducing the frequency and duration of outages and informing customers of probable outage times when they do occur.

Theme 2: Today’s Consumers Are Different from Those of Five Years Ago

Since SGCC began tracking consumer trends in smart energy in 2010, we have noted some statistically-significant changes in consumer attitudes and behaviors. Today’s consumers value the smart grid’s ability to accommodate increased renewable generation more than consumers did five years ago. Today’s consumers are also more eager to adopt new technologies. Since 2010, we’ve seen a 12% increase in consumers who say they are “always eager to be the first one to buy new products or technologies.” Factors like these can help energy providers introduce new products and services to the market.

Theme 3: Utilities Must Show That They Are Acting in Consumers’ Best Interests to Gain Trust

Through SGCC’s longitudinal study of smart energy consumers, we’ve tested three elements of “consumer trust.” The lowest-ranked factor across all segments of consumers was the belief that “my utility acts in my best interest.” Fortunately, DOE’s Consumer Behavior Studies dug deeper and provided insights into how utilities can effectively message programs to help consumers see the closer alignment between utility programs and consumers’ own interests.

Theme 4: SGCC’s Consumer Segmentation Reveals Opportunities for Consumer Engagement

Among the five different consumer segments in our research, we found that each has areas of untapped interest in smart grid-enabled products and services. SGCC’s Consumer Pulse Wave 5 research shows how each segment’s unique attitudes and behaviors might help stakeholders develop messaging to better engage consumers with their services and products.

Theme 5: Research Shows Potential for Smart Metering to Facilitate Time-Based Pricing

A major benefit of one consumer-facing element of the smart grid is the price transparency enabled by interval meters. Time-based electricity pricing communicated by such meters can help reduce the need for expensive peak generation by sending a price signal to consumers to reduce consumption in high-demand periods. Relatively few areas in the US support dynamic or critical peak pricing, although today’s consumers express strong interest in such programs. SGCC research and DOE Consumer Behavior Studies provide insights as how time-of-use pricing programs might be developed in a way that’s compatible with consumer attitudes.

Theme 6: To Date, No One Has Discovered How to Engage Consumers with Usage Data

Although consumers express a desire for more information about their energy use and believe that reducing their energy use in certain periods can benefit both the environment and their finances, utilities haven’t yet found how to make granular usage data compelling enough to drive ongoing consumer engagement.

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While these six key themes highlight the attitudes and challenges that characterize today’s energy consumers, those consumers are already seeing some benefits of a modern grid. Smart grid stakeholders should continue to communicate their successes in an effort to grow consumer awareness of what’s been accomplished and still-greater benefits yet to be achieved.

To learn more about the Smart Grid Consumer Collaborative and the latest developments in customer engagement, please visit www.smartgridcc.org.

—Nathan Shannon, Deputy Director, Smart Grid Consumer Collaborative

This story is republished with permission from ElectricityPolicy.com 

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