As state after state deregulates electricity, forcing utilities to offer lower prices to be competitive with retail providers, and more efficient homes and a growing interest in green technology flattens load growth, many energy utilities have sought new revenue through value-added services.
Through the virtue of being a recognizable, trusted brand that has relationships with broad swaths of customers, utilities are in a unique position to offer services that will improve customer satisfaction and retention. Studies show customers want choice, so offering services customers can choose to participate in increases their satisfaction, and J.D. Power has found increased customer satisfaction means improved ROE.
Despite a proliferation of electric-hungry devices and smart home technology, emerging technologies make it easier and cheaper than ever for homeowners to incorporate green energy. Solar panel prices have dropped more than 70 percent since 2009 and saw an increase in implementation globally by 50 percent in 2016.
Device-addicted Millennials – they spend 90 hours a month using smartphone apps – also have the greatest interest in smart homes, with 86 percent willing to pay up to 20 percent more in mortgage or rental payments for smart home technology, such as smart thermostats, according to a Wakefield Research study. Millennials, who have passed Baby Boomers as the largest component of the U.S. workforce, also are interested in green energy, with 56 percent indicating a desire to incorporate solar panels, according to an Accenture consumer survey.
Between technological advances and grid modernization, the stage has been set for partnerships between utilities and affinity partners in offering new services to customers. Value-added services can fall under three main categories: energy services, home services and information services. Energy services can include items as simple as surge protection, lighting, weatherproofing or as complex as energy storage and electric vehicle charging.
Energy services goes hand-in-hand with information services such as home energy management systems, energy reports and real-time usage information through analysis of smart meter data. Customers can manage consumption and costs through real-time data. Fifty percent of Millennials will pay more for real-time information and 61 percent want an app that remotely monitors their energy usage and controls home elements.
Home services is a developing market that includes home inspection, landscaping, emergency home repair plans and bundled services, such as home security systems. Utilities can use collected data to anticipate customer needs and move into that space before startups.
Those customers who received an emergency home repair plan through their utility rated their provider higher than those who didn’t have policies – an increase of 40 percent for gas providers and 36 percent for electric providers, according to a HomeServe USA survey. In addition, 59 percent of those who don’t currently have policies would have an improved opinion of their utility provider if they did offer a repair plan, while more than half said it would be appropriate for their utility to offer one and more than 80 percent said a utility should inform customers what repairs won’t be covered by the utility.
Utility companies have a leg up on services in all of these areas through their connections to customers’ homes and the huge amount of data collected regularly. Investing in value-added services can increase operating margins and reduce attrition.
HomeServe USA partners with utility providers to offer home warranties, complementing other energy services offerings and providing reliable and convenient repair services for home electric, gas, water and sewer lines. To find out how HomeServe can expand your home services offerings, contact us.