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Time-of-Use Rates: Encouraging Residential Customers to Make the Switch

Just as AMI replaced analog electric meters, the old-fashioned flat-rate bill will soon give way to a more dynamic and variable way for residential customers to pay for their energy use. An increasing number of energy utilities are introducing time-of-use (TOU) rates.

But are customers ready for the change? Those of us in the utility industry have been thinking about AMI and TOU for so long now it’s easy to forget that this idea will be brand new (and probably quite unexpected) for most customers.

In fact, TOU options represent a major paradigm shift for consumers, not just in how they pay their bills but in how they think about their energy use.

To ensure the successful rollout of these rate programs, energy utilities will need to educate customers, explaining how time-of-use electricity rates work and demonstrating how customers can benefit from taking control of their energy use.

What Are Time-of-Use Rates?

Time-of-use rates (TOU rates) refer to energy metering plans that charge a utility customer based on when they use energy. Rates can vary according to the time of day, season and day (weekday, weekend or holiday). Energy utility companies charge more when electricity demand is higher to encourage customers to spread out energy consumption to off-peak times and promote a more efficient and sustainable electric grid.

Educating Residential Customers on TOU Rates

Getting customers on board with TOU rates may sound daunting, but it doesn’t have to be.

To encourage customer enrollment, the first step is awareness, then education and finally action. You can’t expect program enrollment without the first two steps.

Infographic showing how to promote enrollment in time-of-use rates for residential customers

A study from the Smart Energy Consumer Collaborative (SECC) found that fewer than 40% of customers are aware that any kind of alternative rate plan even exists and many people don’t fully understand how their electric bills work. Utility marketers have their work cut out for them.

Indeed, the SECC study found that nearly half of residential consumers do not know what type of electricity rate plan they currently have. Of those who are aware, nearly all of them said they have a flat-rate plan with static kWh pricing.

But there’s hope. The right content can help educate residential customers about TOU rates.

In fact, 70% of consumers say they prefer to learn about a product or service through content rather than an advertisement. So, promotional emails, ad buys and bill inserts won’t always do the trick, but content can.

Include educational articles, videos, calculators and infographics in emails, eNewsletters, social media and on your energy utility’s website. Provide an FAQ page and resources that help customers answer the question, “When is the best time to use electricity to save money?”

The same SECC survey showed that most customers are open to trying time-of-use rates, especially if they offered the potential to save money. These customers just need some help understanding their options. Use education to lead customers toward TOU rate programs.

Benefits & Messaging for Time-of-Use Rates

Your customers are now aware of TOU billing, and you’ve educated them on your different rate programs. How do you bring them toward action?

To reach customers more effectively, it is important for energy utilities to understand the unique needs of customers and communicate how new rate structures can benefit them specifically.

The advantages of TOU billing are obvious for energy providers: By charging higher rates when energy is more expensive, utilities can either recover the cost of peak generation or prompt customers to shift their use to off-peak hours. With fewer peaks to manage, renewable energy sources can be utilized more consistently, making the grid cleaner and more stable.

That all sounds great for utilities. However, a reliable energy supply isn’t really seen as a benefit by customers. It’s an expectation.

When a customer flips a switch, they expect the lights to go on; at the end of the month, they pay a bill. They don’t spend a lot of time thinking about all the steps in between or even how much it costs. Electricity just happens.

So, how do you get them to care? Researchers have found a few main factors are driving customer enrollment in TOU rate programs:

The opportunity to save money
Environmental impacts
Taking control of energy use

When it comes to savings, the incentive must be big enough. Mark Nabong, a senior attorney and transportation specialist at the Natural Resources Defense Council, explains, “Generally, the savings a customer gets from charging off-peak must be two to three times what they might save if they charged during peak hours.”

Customers are also more likely to enroll when they don’t have to pay extra fees for metering or green power premiums. Added fees erase the feeling of savings, even if the final cost is still lower.

Maybe your customers aren’t responding to your messages about supporting a clean and stable energy supply or the potential for savings. Instead, they may be intrigued with the idea of taking control of their energy use.

For the first time, residential customers will have the power to decide how much they pay for energy with TOU rates.

In the past, customers could save energy through behavioral changes or home improvements that reduced their overall consumption, but they paid the same for energy no matter when they used it. There was no benefit for, say, running the dishwasher overnight instead of during the day.

With TOU billing, customers can save money by simply shifting the same energy use to a different time of day — or benefit even more when their efficiency efforts reduce energy use during peak hours. Customers can control when and how they save, making a real impact on their bills.

Effective Program Promotions for TOU Rates

Alright, you’ve boosted awareness, educated customers and refined your message to talk about benefits. How do you handle program promotions?

Segment your TOU communications.

You could try to reach everyone at once, but we’ve found segmentation to be much more effective. Luckily, you can leverage research that shows who is more likely to enroll in TOU rate programs. Focus your attention on those groups instead of exhausting unlikely customers with mass marketing messages.

Electric vehicle owners tend to be more willing to try alternative rate structures like TOU billing. Get in front of customers when they’re purchasing an EV or charger and are most engaged. Another idea is targeting customers who are known EV drivers with personalized messaging around TOU rates.
Those who indicate they care about savings potential over absolute comfort are also more likely to enroll. When onboarding new customers, ask them to rate what’s more important. Those who are interested in savings will be more interested in the benefits of TOU. If you don’t have this level of data, look at demographics to determine lower-income groups who are likely to respond to savings opportunities.
Customers who have taken zero action on their rate plan and remain enrolled in default programming are primed for TOU communications. They are likely unaware of the options that exist and need to be educated on what’s available. Send them a personalized message and boost awareness.
Smart thermostat users and utility marketplace customers are also hot targets. SECC’s research found that nearly half (44%) of residential respondents indicated that they would be willing to participate in a time-based pricing program if automation technologies were deployed in their home to shift electricity use to off-peak times. Smart home technology can do just that. Customers can set their thermostats to save during peak hours and never think about it again. When a customer buys a smart home product from your utility marketplace, consider talking to them about TOU rates and how their new purchase plays a role.
Customers already enrolled in energy efficiency (EE) programs are also more likely to be interested in TOU rates. They have shown actionable interest in reducing their bill and energy footprint. Targeting these individuals with a savings message is likely to increase conversions.

Try a TOU opt-out campaign.

More utilities are choosing to automatically enroll customers in TOU rate programs with the option to opt-out. Pilot programs have shown increased customer satisfaction scores, mostly due to savings. But keep in mind, opt-out campaigns require an extra level of communication and education.

Multi-channel marketing for TOU rates.

You can’t rely on just one marketing tool to reach program enrollment goals. You must reach customers where they are. During a webinar with SECC about TOU programs, Karen McCord, Marketing Specialist at SMUD, shared her TOU promotions and said her team found success with educating residential customers through:

Media relations
Digital and search display ads
Print ads
Billboard and bus ads
Social media
Mobile alerts
eNewsletters
Bill inserts
T.V. and radio
Door hangers
Web content
- Videos with TOU tips
- TOU cost estimator tool
- Program landing page
- Interactive energy-efficient home

Examples of content to educate customers about time-of-use rates

Show don’t just tell.

Shadow billing is a strategy that can help energy utilities show customers exactly how time-of-use rates would affect their monthly bill. With usage data from smart meters, utilities can look at a customer’s electricity use patterns and determine how they would fare on an alternative rate. Utilities can then show this information to customers on their monthly bill to encourage them to make the switch.

Education Will Boost Time-of-Use Rate Adoption

Time-of-use billing will revolutionize the way utilities distribute energy — and the way customers pay for it. By boosting awareness and educating customers on how TOU benefits match their unique motivations, energy utility marketers can boost the adoption and acceptance of new rate options.

Rachel Gold, Senior Manager of the utilities program at the American Council for an Energy-Efficient Economy, says it best: “Pairing automated technology with customer education on the value of off-peak electricity use will help customers understand why this is important while also allowing them to save money more easily.”

Educate your customers about time-of-use rate options with a digital engagement strategy from Questline Digital.

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Battery Storage: What Energy Utility Customers Need to Know

Electricity is typically consumed as soon as it’s produced. Rechargeable batteries can store electricity at times when demand is low and power generation is high. It sounds simple, but your residential customers need to be educated about how battery energy storage works, the difference between battery types and what it takes to integrate batteries with solar panels.

Alternating current (AC) from your energy utility is first rectified to direct current (DC) to charge storage batteries. Home batteries require an inverter that later converts the DC energy stored in the batteries into AC power for use in the home. Battery energy storage applications include increased solar PV self-consumption and time-of-use rate management. However, most homeowners buy energy storage for backup power.

The battery unit is usually installed near a customer’s main distribution panel and then rewired to a critical loads panel. This is expensive and complicated. For the critical loads panel, the homeowner specifies the rooms or appliances they want to have powered during an outage. Unfortunately, many battery systems alone cannot provide the startup current for even low horsepower motors like well pumps or small air conditioners. However, high-power inverters or add-on soft-start kits are available to make this possible at an extra expense.

Types of Batteries for Home Energy Storage

There are two major types of batteries used for residential energy storage.

1. Lead acid batteries

These batteries are made up of numerous lead plates separated by a porous insulator. This assembly is immersed in an electrolyte made from a sulfuric acid solution. They are designed for 77-degree F ambient temperatures, are three times larger for the same kWh rating as lithium-ion and only allow for 50% depth of discharge. They are very heavy and require close monitoring of the battery’s state of charge and fluid levels. More expensive valve regulated lead acid (VRLA) and absorbed glass mat (AGM) batteries are sealed, requiring less maintenance.

2. Lithium-ion (Li-on) Batteries

A rechargeable lithium-ion battery uses a cathode made from a lithium oxide material (not metallic lithium). The highest power capacity li-ion systems (used by Tesla) incorporate a cathode combination of nickel-manganese-cobalt (NMC). However, charging too fast can promote thermal runaway due to the cobalt content and could potentially start a fire. Lithium iron phosphate batteries (used by Sonnen and others) are cobalt-free but provide much less energy storage capacity. Li-on batteries can be discharged to below 10% capacity, which essentially doubles the useful storage capacity compared to lead acid for the same capacity rating (kWh).

How Much Does a Home Energy Storage Battery Cost?

According to BloombergNEF, the cost to manufacture li-on battery packs has steadily dropped and is now around $137/kWh, less than half the cost in 2016. BNEF forecasts the li-on battery price to drop to $100/kWh in 2024 and $75/kWh by 2030. According to EnergySage, a 5 kW (13.5 kWh) battery storage system today will cost around $6,000 to $7,000 for batteries, plus $4,000 for other equipment and installation. Major home battery storage suppliers include Tesla, LG Chem, Sonnen, BYD, Enphase and Pika Energy/Generac.

What is the Capacity of a Home Energy Storage Battery?

The required battery size depends on the amount of power a home uses, the time periods it uses power and the peak electricity demand required to meet their maximum load. The average home consumes about 28 kWh daily. Going completely off-grid would require a large bank of batteries. Residential battery storage suppliers offer units with ratings of 3 to 8 kW of continuous power and 3 to 20 kWh of storage capacity.

Battery Storage for Home Solar Panels

Battery storage is a great option for homes with solar panel systems. There are two ways solar battery storage operates:

AC coupling feeds solar panel DC power to an inverter, which then supplies AC power to the home and (when needed) draws power from the grid. Battery backup is added on the grid side with its own inverter to store excess solar energy or to charge from the grid. Any electricity that is stored in the battery system needs to be inverted three separate times before use.

DC coupling feeds solar panel DC power to a charge controller, then to the batteries. A single inverter then converts the DC battery power to AC power for the home. Stored electricity is only inverted once before use. Note that DC coupling cannot be used with microinverters and cannot store power from the grid.

Hybrid systems combine both DC and AC coupling to take advantage of the benefits of both.

Are Permits Required for Home Batteries?

Some authorities may require re-permitting of the existing PV system if a new inverter is installed. Restrictions on permissible battery locations and clearances from existing equipment may also be enforced.

Recommendations for Energy Utilities

As customer interest continues to grow, how should energy utilities address energy storage batteries for homes?

Emphasize the non-backup power benefits of energy storage such as time-shifting or arbitraging their solar-generated energy.
Encourage customers not to piecemeal a system together. The battery subsystem, inverter and control software should be an integrated package.
Confirm ahead of time that every critical component in the battery system is acceptable for interconnection by your energy utility.
Make sure battery units are listed to UL 9540, the Standard for Safety of Energy Storage Systems and Equipment.
Check ahead with the city building department or other authorities to understand permitting requirements.
Make incentives easy to apply for and paid directly to the customer.
Verify that the scope and terms of the battery warranty meets your customers’ expectations.

Energy storage is on your customers’ radar. This resource can provide backup power, improve the grid’s efficiency, potentially lower energy costs for customers and play a key role in the smart grid of the future. Energy utilities need to make educating customers about energy storage a priority.

Need to educate customers about new energy technologies? Learn how to build engagement and keep them informed with a monthly eNewsletter.

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New Research: Energy Customers in Search of Guidance

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.

How does your energy utility educate customers about new technology? Learn how a content strategy from Questline Digital can help.

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Smart Thermostats Review: Controlled Comfort

Smart devices continue to make their way into more homes each year. According to research, nearly 65% of Americans own at least one smart home device, with some of the most popular devices being speakers (31%), smart thermostats (24%) and lighting (20%). How are customers actually using these devices? We asked four members of the Questline Digital family to share their review of smart thermostats to help us understand how this technology makes their homes more comfortable.

What are smart thermostats?

Between smartphone apps and energy efficiency smart settings, controlling your home’s temperature has never been easier. Smart thermostats are Wi-Fi-enabled smart home devices that automatically adjusts the temperature inside customers’ homes for optimal performance. Customers can also use app-enabled functionality to manually turn the temperature in their homes up or down, even when they aren’t there.

What smart thermostat options are available?

The very first smart thermostat was introduced in 2007 by Ecobee. Lots of worthy competitors have since entered the smart home market, including Google Nest, Honeywell Lyric and Hive.

As consumers continue to adopt smart home technology, it’s imperative for your energy utility to stay ahead of the trends. When it comes to smart thermostats, it’s important to understand what your customers are looking for and what influences their buying decisions.

To better understand the benefits and buying considerations for smart thermostat customers, Questline Digital interviewed the following team members:

Joe Pifher, Creative Director (JP)
Reed Fabek, Operations Director (RF)
Jayne Culbertson, Client Success Manager (JC)
Suzanne Davis, HR Director, and her husband Eric (SD and ED)

What smart thermostat do you own?

JP: A Google Nest.

RF: I owned a Hive at our old house and currently have a Google Nest.

JC: I have a Google Nest.

ED: We own an Ecobee.

When did you decide you wanted to purchase a smart thermostat?

JP: The second they became available. As soon as I heard about a Nest being created by an ex-Apple employee, I knew I wanted it. The Nest was the only one I knew to be available at the time I purchased my smart thermostat.

RF: Three years ago at Christmas.

JC: As soon as we bought our house in 2018 or 2019.

ED: In November 2020, the AEP Ohio It’s Your Power program ended. The Powerley thermostat that we had received as part of the program could no longer communicate to the energy bridge and give us smart meter data. In advance of the program ending, I started researching a replacement for our thermostat.

Why did you want to purchase a smart thermostat? What stood out to you? Where did you buy it from?

JP: I liked the fact that I could control it from my phone and if we were traveling I could turn it down or turn it back up. And it looked neat. It was the next cool techy thing, and I like being on the forefront. I bought mine directly from Nest — Nest wasn’t owned by Google at the time so I ordered it straight from the website with a preorder.

RF: Hive was offering a deep discount. I had general awareness of the competitive products and features. Cost savings and improved sustainability were my two driving interests. I really believe in green philosophies and I like ways in which technology can help me be more cost-effective with the things that we buy. Green is a big initiative so I really wanted to get a smart thermostat.

I bought one coincidentally because Amazon was offering this huge discount on the Hive thermostat. I already had exposure to the landscape of what products existed thanks to one of my former roles helping create a smart thermostat campaign for an energy utility. I knew they were out there.

Hive was top of my list, Ecobee and Google Nest were tops for the functionality and aesthetic, but I couldn’t pass up the price. We moved last August into our new house and the second day we were here I went out and bought a Nest because I was at Costco and it was there. I bought it and didn’t even think twice about it. I knew I wanted a Nest — I’m tied in with Google and Android and Amazon and all of those things intersect with the Nest thermostat.

JC: We already had Google Home products and we liked the idea of sitting in bed being able to change the temperature. Or, being away from home we liked that we could automatically update the temperature and settings without being there. We bought ours from Columbia Gas.

ED: I really liked the ability to remotely control the previous thermostat through the mobile app. I wanted to replace that functionality in a new smart thermostat. I was also hoping for energy usage reports. Because the new thermostat does not communicate with the smart meter, I cannot get the level of detail I previously had. I also wanted something that would either learn our behavior or sense whether we were there — and make adjustments accordingly. Our previous Powerley thermostat was not smart in that regard. We bought it from the Columbia Gas online marketplace.

Did you ever consider purchasing from your energy utility or seeing if they offered any rebates or incentives on a smart thermostat?

JP: Smart thermostats were brand new when I bought mine so there was no relationship like that yet with energy utilities.

RF: No, sadly. I know some utilities will subsidize a portion of the cost, but both were impulse buys, so I didn’t check my utility provider.

JC: We bought it directly from Columbia Gas because my husband worked there at that time and we were able to get a discount or rebate on it by purchasing it through the utility.

ED: Yes, I went with Columbia Gas over the AEP Ohio marketplace solely based on cost. The instant rebates were much better on Columbia Gas’s site; AEP’s discounts had previously expired. These were $250 thermostats for $125, so I bought 2 of them in December during a holiday promotion.

Did you research different smart thermostats before purchasing what you have?

JP: No, I was just intrigued by how it said it would learn your patterns by motion sensor to know if you’re home or not.

RF: I managed the Smart Thermostat EM campaign for a previous client, so I had a decent amount of background knowledge from my work on the program.

JC: No, we already had a Google-functioning home so that’s what we went with.

ED: Yes, I was also looking at the Nest Learning Thermostat, along with the Ecobee Smart Thermostat with voice control. I also looked at Emerson and Honeywell. I was hoping for a definitive recommendation from the articles I read. But some rated Nest the best, and others Ecobee. And some of the other brands also had some good reviews. Although most seemed to recommend Nest or Ecobee.

I also reached out to one of my co-workers and he was leaning toward the Ecobee for its reporting features and ease of use. I also asked other co-workers and they steered me away from Google products due to privacy concerns they had around Google. Although not as sleek as the Nest, the user interface is still very easy to use and the unit has better design appeal than some of the other brands.

Is there anything you wish you knew before purchasing it?

JP: No, I pretty much knew what was going to work or not work. Post-purchase, though, I think I would have maybe waited and gone with the Ecobee instead. The Ecobee has sensors you can put in rooms so you can set it for certain times to adjust for where you are in the house.

RF: I wonder if it would have been more cost effective to go through my energy utility. I also would have liked to know more about the reporting and tracking features and what the benefits or investments are for purchasing a smart thermostat in terms of cost savings.

JC: Not necessarily about the product but knowing more about the monthly emails and what those track would have been nice. Now I know that it compares how much energy I save and I can collect leaves, or points, that basically compares my energy usage to others in my area and across the nation. It creates a sense of competition and it would have been nice to know those things earlier on.

ED: This was hard to get an answer to, but will there be future connectivity to my energy bridge, so that I can get real-time and historical energy usage from the Ecobee app. My co-worker seemed to indicate that devices like Nest and Ecobee would be compatible in the future, should AEP Ohio be successful in re-launching the program. I should have explored the energy savings reporting in more detail to see what I’d be getting with the Ecobee.

Did working in the energy utility industry influence your purchasing decision?

JP: At the time of purchase, I didn’t work in the energy utility industry. Now, however, it absolutely would have impacted my decision. Knowing that they give discounts and rebates I definitely would have gone through my energy company.

RF: I do feel that I know more information about the utility space from my professional involvement versus any information that’s been provided to me as a consumer.

JC: I didn’t work in the industry when we purchased our smart thermostat, but my husband did. However, I don’t think it really impacted our decision. Other than the fact that we could get it through the gas company for a discount, we were already sold on it.

ED: Completely.

What are your favorite features of the smart thermostat?

JP: That I can change it from my phone while laying in bed.

RF: The aesthetic and interface of the Nest is phenomenal. Hive wasn’t bad, but it did require a hub appliance to connect to my home network. The ease of use was comparable between the two, but the interface on the Nest is very intuitive, and has a richer feature set for customizing my home automation. Installation for both was fairly straightforward — I did both myself.

JC: That I can lay in bed and change the temperature. I also like that you can set when you’re away so when I’m not there it will drop the temperature. Honestly, just using the thermostat too is fun — changing the dial is even a nice experience.

ED: I enjoy being able to control the temperature through the mobile app, but also to walk up to it and simply use a slider-type user interface to adjust the temperature up or down. The set-up and scheduling is intuitive. It’s also nice to see the outside temperature and indoor humidity at a glance. The mobile app sends me alerts when I need to take action. For example, it reminded me that it was time to change the furnace filter. When I turned off the humidifier, it alerted me of abnormally low humidity. These alerts also appear on the thermostats themselves. We have two sensors with each thermostat, which detect room occupancy. The thermostats will go into Eco mode when they sense we’re not there, which will save energy. The thermostat has also made recommendations on changing our temperature settings based on its detection of patterns of room occupancy, to save energy and money. This is a great feature.

I have not explored the reporting as in depth as I thought I would, because I know it won’t give me the robustness that I was accustomed to with It’s Your Power, and also because I’m enjoying how things are working so far and am still uncovering features a few months into ownership. We do also receive AEP Ohio weekly home energy reports, which summarize my kWh usage and cost, so my need for reporting is satisfied elsewhere. We have not used the voice control in the upstairs thermostat; I mainly bought it because it was a great price and came with two sensors. Going with the cheaper model but adding in sensors would have been just as costly.

The integrated Alexa has been a novelty. Because we have two thermostats (one upstairs and one on the main level), Alexa gets confused if we ask the downstairs one to change the temperature. We need to be specific with how we speak the name of the thermostat when talking to Alexa.

How do you typically use your smart thermostat?

JP: I let it do its thing most of the time. And then if I think it’s too hot or cool I change it from my phone. It has an option to learn its own pattern, but I ended up setting the pattern myself because of how the installation in my house would affect the timing of the automatic pattern. I like seeing the monthly emails come in, too, when I realize I use more energy than my neighbors. It makes me want to figure out why my energy usage is higher.

RF: I really use it for the basic temperature control. I’d like to look at it on a deeper level to see what else I could do with it.

JC: I use it mostly for adjusting the temperature when I’m not home.

ED: I have both thermostats programmed for days and times of the week when we are home and sleeping. Since we’re all working and taking classes from home, I have not set up away modes yet. Otherwise, I let them run, and manually adjust as I need to. In the winter, I sometimes manually turned up the heat while still in bed, to pre-warm the room. Eventually, I re-programmed my schedule to do that automatically for me. We also ask Alexa trivial questions, set timers and play music. And if I’m lazy, I’ll ask Alexa to make it warmer or cooler.

What would you do differently next time, if anything?

JP: If I did it over again, I’d do more research to see which one would work best for me. And I’d go through my energy utility to purchase it.

RF: I think I would do more research into purchasing it directly from my energy utility. I also would like to know ahead of time more about the tracking and efficiency functionalities of the device.

JC: I think if my energy utility would have said something more about its promotions or offers we probably would have gone through them for purchase with more specific rationale. Otherwise, we’re really happy with everything — how it installed, integrated and connected over to everything was easy.

ED: If I had to do it over, I probably would not have spent the extra money on the voice-enabled thermostat for the upstairs. I haven’t even turned it on yet after four months. I would have gotten the Ecobee3 Lite Thermostat and considered adding room sensors. I did it because the price was half off. But given how we’re using it on the second floor, it feels like a splurge.

Then again, we are putting the sensors that came with the thermostat to use on the second floor, since we’re all here in the home much of the time. And I do enjoy how it learns and makes recommendations; it’s just that so far, I have chosen comfort over savings and have not implemented the suggestions. And once things return more to normal and we’re not home during the day, I don’t know how much value the sensors will have — probably just evenings and weekends.

Also, I relied on third-party reviews, and I don’t remember if I even went to the Ecobee website to read about its products. In retrospect, this might have been helpful in seeing all the differences between the thermostats, rather than solely relying on reviews and on Columbia Gas’s descriptions.

Also, I have yet to use these thermostats during the cooling season — it’s all been heating. I’m very curious to know how things go once we start running the A/C.

Finally, I did have an issue with the upstairs thermostat that was likely based on a poor wiring connection that I made when I installed it. Ecobee was super helpful and friendly and walked me through different diagnostics, and I was able to fix it myself with their instructions. They have support through phone, email, and online chat. They could see all the history of when I was encountering a problem, which was both helpful and a little unnerving at the same time as I realized my data is out there. Then again, it’s just temperature and furnace data.

Review your utility’s engagement efforts around smart thermostats

As customers continue to integrate smart technology into their homes, including smart thermostats, is your energy utility prepared to guide them along their purchasing journey? Continue to listen to your customers’ needs to understand and connect with them in ways that matter most. In doing so, you’ll be able to gain valuable customer trust and increase engagement with your energy utility’s online marketplace.

Promote your energy utility’s smart thermostat rebates and incentives with a Marketplace Content Strategy from Questline Digital.

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Webinar: Smart Home Technology and Your Customers

Smart home technology is on the rise. In the last two years the number of households with smart speakers has grown by 135%. Between those, robot vacuums, video doorbells and more, there is no shortage of technology claiming to make our lives easier. Why is this important to know? Well, your energy utility customers are purchasing smart home devices and, in doing so, developing relationships with other technology companies rather than your energy utility.

In Questline Digital’s Plugged In webinar, “Smart Home Technology and Your Customers,” expert speakers from Questline Digital, GreenMarbles and ibex navigated the smart home landscape by sharing insights into why customers are interested in these gadgets and how your energy utility can guide them on their purchasing journey.

Customer relationships matter in smart home technology adoption

Alexandra Greenberg, Content Strategist for Questline Digital, explained how the growth of smart home technology presents numerous relationship-building opportunities for your energy utility. More than 60 million Americans now own at least one smart home device. As the technology continues to advance, it is all the more reason for your energy utility to create a trustworthy relationship with customers to be part of these buying experiences.

According to Smart Energy Consumer Collaborative (SECC) research, 42% of consumers said the involvement or endorsement of their utility would influence their adoption of new technologies. Without a relationship between your energy utility and its customers, they will look elsewhere for resources and information. For example, Google Nest provides monthly eNewsletters that include efficiency and safety advice and personalized reports on customers’ energy usage. Greenberg said, “You want your customers to look to you for this information, not anyone else.”

Content marketing allows your energy utility to share this information and build customer relationships with articles, infographics, videos and more. For energy utility customers, these solutions are valuable when making purchasing decisions. Content marketing can also help drive customers to your energy utility’s marketplaces. What’s important, Greenberg points out, is to ensure the content you share doesn’t sell to customers, but educates them with valuable information and answers their questions.

How utilities can communicate smarter around energy technology

Although smart home technology may be on the rise, many customers still don’t know exactly what smart home devices are. David Cathey, SVP of the Utility Division for GreenMarbles, explained that “A smart device is a device that has purpose-drive communication capabilities.” He noted that many people have smart devices, but do not have smart homes. This is because the devices they own aren’t communicating with each other. Energy utilities need to be able to assist customers in purchasing devices that speak to each other and create packages for them that meet their customers’ needs.

Traditionally, energy utilities stop at the meter when helping customers, Cathey said, but this is changing with the future of smart tech. “Moving beyond the meter with experiences around energy, automation, security and wellness is necessary to become a partner to customers and make their lives easier,” he said.

Energy utilities need to not only market smart tech devices but fulfill the customer service gaps that exist within the industry. Customers want to know that someone is there to help answer their questions or help them install their smart tech devices. In doing so, customers will trust their energy utility and will return for future buying experiences.

Cathey noted that “Security is the primary purchase motivator for smart home technology.” Once customers enter the market through this motivation, they are likely to continue adding devices to their home and will look to your energy utility for resources.

Age demographics are also very important when it comes to smart home technology. Often, it is thought that the younger generations are most interested in the technology, but those aged 65 and older are very interested as well. Smart home technology enables these customers to stay safe, secure and save money. As these individuals age and reach the point where they may consider moving into senior housing, smart technology could help them reconsider. Cathey said that customers who invest in smart home technology stay in their homes nearly two years longer than those who don’t. In other words, they also stay on as your energy utility’s customer for longer.

Bringing smart tech home with effective marketplace sales

Mark Wilkinson, SVP of Products for ibex, joined the conversation to discuss the impact of energy utility marketplaces. “It’s no longer a question of whether or not customers have embraced smart home technology or will they buy it; they are buying it,” he said. “Now the question is, how can we help our consumers actually get the most value out of this technology? The time has come for utilities to embrace marketplaces.”

Wilkinson noted that in today’s digital age, there is no reason not to have a marketplace. He pointed to a Chartwell study that found “57% of customers use or have interest in marketplaces from their utilities.” Those numbers further increase when it comes to the Millennial or Gen Z populations, digitally inclined customers who are already likely to buy more products and services online. Partly due to the coronavirus pandemic, Wilkinson said now “everyone is an ecommerce shopper” and energy utilities need to embrace this.

When it comes to energy utility marketplaces, design matters. When competing with the likes of Amazon, Walmart or Best Buy, energy utilities need to present their marketplaces as the go-to resource for customers looking to purchase smart home tech. Wilkinson shared the key elements to think through when it comes to designing a marketplace including making them:

Modern
Easy
Mobile
Visual
Multi-channel

When considering what items to include on the marketplace, it’s important to have the right-sized catalog. Customers are typically interested in a few key areas when looking for smart tech products to buy:

Safety
Security
Convenience
Comfort
Entertainment

A marketplace site should be a destination that customers want to come back to. Utilities can do this by offering comparison lists, educational libraries or video tutorials for installing smart home devices. In addition, personalize their experience on the marketplace by understanding where they live, keeping track of their purchases and how they click-through the site. Customers aren’t demanding personalization, but they are expecting it, Wilkinson said.

Smart technology is coming home for energy utility customers

Smart home technology is changing the way customers interact with their energy utility. Keeping up with these changes and offering the advice and solutions your customers need can create lasting relationships. Amazon and Google aren’t going anywhere, but now is the time for energy utilities to step up in the space and become the go-to resource for customers when it comes to smart home technology.

Educate your customers about smart home technology with a content marketing strategy from Questline Digital.

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