How do your customers feel about new energy technologies? Smart Energy Consumer Collaborative’s 2021 State of the Consumer Report offers important insight into the attitudes, concerns and motivations driving adoption. Among the results in this year’s report, SECC found that:
- Consumers are making the connection between smart energy and slowing climate change.
- Consumers across all segments are interested in smart energy-enabled products.
- Lower-income consumers are keenly interested in smart energy and the environment.
- Consumers need more education on how to assess a program or technology.
- Consumers look to their energy providers for support as they deal with the impact of COVID-19.
- Consumer education and engagement are essential to realizing the promise of beneficial electrification and advanced technologies such as AMI.
Smart energy and climate change
SECC reports that each of their identified customer segments — Green Innovators, Tech-Savvy Protégés and Movable Middle — agree that “electricity is becoming cleaner and more renewable every day.” The research shows that customers “might participate more in energy efficiency and conservation efforts if they were more aware of programs offered by their electricity providers.”
In particular, consumers from the Movable Middle and Tech-Savvy Protégé groups felt that there hadn’t been enough promotion of anything new from their energy utility. They wish their utility was more transparent in their communications of their billing process and how to lower bills.
No matter what level of engagement they had with energy, consumers agreed that they want political and community leaders to prioritize climate change concerns. Specifically for the electrification of transportation, consumers want investments made in infrastructures that would allow for more electric vehicles, electric charging stations and electric public transportation.
Industry stakeholders believed that customers would more fully appreciate beneficial electrification if they understood how it works and could affect their lives.
The main takeaway for utilities: Consumers may be more interested in adopting beneficial electrification for environmental reasons, but it’s up to the energy industry to better educate and promote the benefits.
Customer interest in smart energy products
SECC found increased interest in smart home technologies across all customer segments. In particular, Google Nest was mentioned most frequently in interviews, with Alexa and Google Home being referenced less often. Research shows that “smart energy product purchases tended to be driven by a desire to own the latest ‘cool’ technology.”
Products such as smart thermostats are seen as “gateways” for future smart home technology purchases. SECC says that consumers are also more likely to make smart home upgrades when they move and reevaluate their current devices.
Cost and functionality were the top two customer concerns when looking to purchase new smart home technology. When it comes to high-end products like electric vehicles, 51% of Green Innovators would make the switch if the cost was the same as a conventional vehicle. Consumers with less income are also interested in switching to smart home products, but they want to ensure these upgrades will save them money over time. SECC suggests communicating with this target audience in a way that highlights “the benefits most meaningful to these consumers.”
The main takeaway for utilities: Understanding the barriers to smart home adoption is essential for promoting use across all customer segments and income levels.
Lower-income consumers interested in smart energy
SECC begins this theme of the report by explicitly stating, “When it comes to engaging with energy, the values, interests and motivations of lower-income consumers are as varied as those of consumers with more disposable income.” SECC says there are distinct personas to understand when trying to relate to this segment:
- Environmentally driven consumers, who value air quality and environmental protections.
- Smart energy receptive consumers, who would like to use smart energy technologies but believe the cost puts them out of reach.
- Smart energy decliners, who do not see the value of smart energy technologies for “people like me.”
- Climate change skeptics, who believe concerns about climate change are exaggerated.
Although all consumers are influenced by cost, the lower-income segment is most sensitive to it, with about 47% of SECC respondents saying “the money I can save” influences their buying decisions. However, comfort, ease of use and interest in protecting the environment are all of varying interest to consumers when considering energy investments.
SECC’s research sheds light on lower-income consumers:
- 81% implicitly or explicitly expressed concern for the environment.
- 35% would be very interested in rooftop solar panels with help from their provider.
- 33% were very interested in community solar generation.
According to SECC, the main difference between lower-income consumers and other consumers is access. “Consumers with greater means are better able to avail themselves of the full range of smart energy products and programs, while lower-income consumers face more barriers.” If energy utilities want to be successful at converting these customers, they need to understand their needs, remove or reduce barriers and leverage community partnerships.
The main takeaway for utilities: The energy industry has to include under-resourced communities in infrastructure planning to ensure these consumers can share in the lower costs and other benefits of clean transportation.
Utility customers need more education
Consumers understand the impact of energy efficiency, but they don’t know how to determine if energy products or programs will impact their usage. “While consumers are increasingly interested in smart energy, they are more likely to engage with energy-enabled smart products than with programs offered by their electricity providers,” SECC research finds.
More to the point, consumers say they are happy with their smart products, but they don’t know if it’s making a difference on their bills. While consumers are motivated to purchase the latest smart technology, they don’t have adequate tools to support their decision-making process or gauge whether a product or program will save them energy or money.
In response to this, energy utilities need to offer incentives and tools such as bill impact estimates or calculators to help consumers understand potential savings. In addition, energy utilities need to provide rate plan analyses, shadow billing, bill guarantees and other tools that help quantify savings.
They also need to personalize these items to specific consumer segments. SECC data shows that 69% of lower-income consumers “definitely would or would consider sharing their data in exchange for information on how to save money while maintaining comfort or a monthly report showing their energy usage data with personalized tips on how to save.”
In addition to cost, other consumers cite functionality as an adoption barrier. To reach these customers, energy utilities should provide education, testimonials and hands-on demonstrations. Lower-income customers, in particular, need more personalized data from their utilities that clearly showcases product or program benefits.
The main takeaway for utilities: Energy utilities need to put ample investment in personalized education and communications with their customers if they want them to convert.
Customers look to energy providers for COVID-19 support
The coronavirus pandemic has led consumers to pay close attention to how their energy providers react and support them. Many consumers say the pandemic prompted them to be more aware of their energy use. For lower-income customers, the pandemic has added to the burdens they already face, including increased concern over paying their utility bills.
Before the COVID-19 pandemic, SECC research shows that about 90% or more of lower-income customers were satisfied with their energy utility. However, after the pandemic, these same consumers were decidedly less satisfied with only 70% satisfaction rates.
SECC’s research on lower-income customers shows that other concerns related to the pandemic, including general stress, were more important than worrying about bills. “That means electricity providers are in a unique position to increase satisfaction among these customers by finding creative new ways to support them through this difficult time.” As the pandemic continues, many energy utilities should reassess financial assistance programs and policies to continue helping these customers.
The main takeaway for utilities: Taking steps to support customers now will lead to more trust and greater engagement in the future.
Education is needed for new energy technologies
When it comes to promoting beneficial electrification or implementing new technologies like AMI, energy providers need to learn to talk about energy in a way that speaks to the values of the consumer and to not assume what consumers know or want.
To hit home on this point, SECC notes: “Research into the needs and behaviors of the modern smart energy consumer shows that, once consumers acquire a ‘gateway’ product, they have an appetite for more, but whether they are likely to follow through depends a great deal on their motivations for engaging with energy in the first place, and this varies greatly depending on their values. Even the most disengaged consumers, the Energy Indifferent segment, can be moved to act when the moment and the message align with their primary motivators.”
In particular, AMI deployment has reinforced the importance of the value of relationships between energy providers and customers. “Today’s consumers have more choices than ever before, and across segments and income levels, they value control over their environment. They expect proof of value and want unbiased, personalized information” SECC says.
AMI has the opportunity to create more active and engaged customers by providing valuable data on how consumers can integrate products and services.
The main takeaway for utilities: Energy providers need to listen to their customers and use their input when planning for programs. When there is collaboration between community partners and consumers, success follows.
As the smart energy industry continues to advance, it’s important for energy utilities to progress with it. SECC offers invaluable research and data to help guide energy utilities on this journey.