Solar energy prices have seen a sustained decrease – it once cost 20 times as much as coal to generate the same amount of energy with solar panels. However, the price dropped by more than 90 percent and is now comparable to fossil fuels.
Solar distributed energy resources (DERs) have had increased interest and implementation, valued at $52.5 billion in 2018 and estimated to reach $223.3 within the next six years. Accordingly, the U.S. Department of Energy recently announced a $100-million, five-year initiative to research solar fuels.
Millennials Are Going Green
Interest is, in part, because of Millennials’ desire to turn over a greener leaf. They are willing to invest up to $15 per month for renewable and solar energy and prefer environmentally friendly services – and they’re inclined to research their provider and switch if they feel a better deal is in the offering.
Although the cost per watt has come down from $76.67 in 1977 to 60 cents, the upfront costs still are keeping solar energy out of reach for low-income Americans. An estimated 80 percent of those who want solar energy can’t install panels on their homes.
Arrays Present an Opportunity
Solar gardens, a community or utility-led solar array, are affordable alternatives to installing panels at private homes. Solar gardens pool the costs and the benefits, making it an attractive option for those who can afford to buy-in or “subscribe.”
It also makes it the perfect solar energy entry point for utilities. More than sixty percent of utility professionals predict continued renewables growth, and some are capitalizing on the demand.
Solar energy consumers can purchase a share in an array by subscription or lease-to-own, and, in most cases, the utility will calculate energy generated from the consumer’s “share” of the array and credit it to their account. The overall annual cost for the subscription or lease can be greater than purchasing energy without the clean option. However, as previously noted, a growing number of consumers are willing to pay more for renewable energy.
Consumers show a preference for flexibility, with month-to-month contracts and no upfront or cancelation fees, and on-bill benefits and billing. This reflects the growing power of the Millennial market and their subscription culture.
Community solar energy grows as interest increases and the prices drop. There is nearly 2 GW of community solar installed across the U.S., an increase of more than .5 GW since June. With utilities owning just over 30 percent of capacity, there is plenty of room for growth where consumers demonstrate demand.
Encouraging engagement through value-added services such as solar energy is an important and necessary part of retaining the Millennial customer. HomeServe can improve customer engagement and satisfaction by offering a suite of optional home systems repair products and educational materials. To learn more, contact us.
The flattening load growth and search for new revenue channels is old news to utilities – the question now is: What is required of your consumer engagement strategy?
The retail and service markets already exist, but products like smart thermostats and electrical vehicle charging stations are expected to be a billion-dollar market by 2030 for utilities and third-party vendors, according to a July 2018 study.
Selective Engagement
The first hurdle is engaging energy consumers. Forty percent are “selectively engaged,” and the old messaging standbys are as old news to them as the changing face of the industry is to you. They can be lured in with energy efficiency offerings, because saving money is a strong motivator for them.
It makes sense that these consumers usually have average or below average incomes and some can’t afford the upfront costs of energy efficiency, opening up an opportunity to offer on-bill financing, a little-used approach, or a web-based marketplace offering energy-efficient products.
Pain Points
Speaking of the bill, many selectively engaged consumers are frustrated by what they see as confusing and opaque billing practices. Lower those frustrations by making it easier to redeem rebates. Even simply educating consumers in already available rate-savings plans and how to better manage their bill or usage can improve your engagement strategy.
One of your most useful tools in engaging consumers is data – analyzing your already available data will provide insights that will enable you to personalize your messaging, and provide information that is of interest to that consumer. As more of them plug-in to smart home appliances such as thermostats, HVAC systems and water heaters, even more data will be available, allowing you to further target and offer additional products and services.
The “Always Engaged”
Another segment of energy consumers is the “always engaged,” and many are digital natives who want options and know where to look for them. Millennials, the largest generation in the country, are already part of the “subscription culture,” paying monthly fees for everything from entertainment to clothing. However, these services are highly accessible, personalized and available over multiple channels, expectations utilities need to meet.
Utilities have been slow to adapt to this digital tribe, but it’s not impossible to master if you look at the customer/member experience holistically, paying special attention to billing and payments, managing usage and reporting outages – all bread-and-butter issues that have a large impact on satisfaction.
Millennials often are “green champions,” having shown an interest in solar technology and electric vehicles. In suggesting products and services that help save energy and money, utilities can play the role of the trusted advisor, framing product and service offerings as an opportunity for choice. Offering value-added services through predictive and proactive apps and websites from which a customer can monitor their usage, purchase energy-efficient products or share energy-saving tips offers another avenue for engagement.
What’s Important to Your Engagement Strategy?
You know that engagement is important, but how much of your resources do you dedicate to it when your primary goal is to maintain a safe, reliable source of electricity even as the grid is aging and evolving? Consider entering into an affinity partnership instead of managing everything yourself. You can’t do it all, but you don’t need to – there are companies that specialize in the technology and services energy consumers want with very little risk to you.
