by Gene Wang, People Power
Utilities have been developing home energy management (HEM) programs for the past decade or so but with fairly low customer engagement. Apathy, lack of education and relatively stable energy prices contributed to slow adoption.
A 2012 study found that the average person said his or her monthly bill would have to go up about $10 a month before he or she would spend money on energy-efficient retrofits. The Internet of Things industry, however, has propelled HEM forward during the past few years, providing homeowners with tools that are compelling enough to lower energy consumption and hold consumers’ attention and effect long-term behavior changes. Given that clean tech investment advisors Manifest Mind predicts the North American HEM market will reach an annual value of $2.2 billion by 2022, utilities should implement resources and tools to engage customers further as the market begins to take shape.
Today’s utility customers are different from those in the 1980s, 1990s and even the early 2000s. According to the “2013 Demand Institute Housing & Community Survey,” 90 percent of households have done something during the past five years to consume less energy, such as switching to CFL or LED bulbs or sealing leaks. Today’s consumers are open to changing their energy consumption; they just need the tools to make behavioral changes.
Utilities will see the benefit in implementing HEM programs twofold. One of the most pressing issues for the industry is old infrastructure, according to Utility Dive’s “State of the Electric Utility” survey. If providers can lower consumption, especially on demand, they won’t have to make billion-dollar investments in new plants to address peak usage. Customer engagement also means those customers are likely to see a decrease in their monthly energy bills, and happy customers are key to any successful business. As your company begins to incorporate HEM programs into service offerings, here are three tips to help get and keep your customers engaged.
Education isn’t Enough
Chances are your customers already know they should use less energy. They probably even know a few ways to cut back, like turning off and unplugging appliances when they aren’t in use. Unfortunately, education alone won’t alter their behavior.
For example, most people know that regular exercise is good for their health, but it takes the right combination of education (Where can I exercise? What types of exercises work best for me?), tools (perhaps a wearable device, an app or gym buddy) and support system to get into a routine that works. Reading about exercise is not enough. The same is true when it comes to home energy management; a combination of education and tools will garner better results than education alone.
Instead of simply including a list of tips for reducing energy consumption in the kitchen, it’s better to link consumers to an activity page that engages their entire families. You also could recommend an app that shows real-time energy use within their homes so they can see the impacts of their behaviors. By creating activities that require consumers to take action and following up with information about the impact of those actions, such as showing the expected or actual reductions in their monthly bills, utilities are likely to find customers who continue making changes and building new energy-friendly routines.
Use Existing Technology to Make an Impact
Just because it’s called the Internet of Things, consumers don’t want another “thing” to track all day. Stand-alone energy monitoring devices might be enticing for a short time but are likely to wind up stashed in drawers and forgotten quickly. Customers are much more likely to engage in HEM if it can be integrated seamlessly into their daily routines using technology with which they are familiar, like smartphones, tablets and computers.
Developing or using an existing app is a great way do this. An app can work in two ways. It can act as a way for utilities to push information easily to customers in real time (e.g., the impacts of customers’ energy use and tips on reducing consumption). As summer rolls around, utilities can send short tips on keeping cool, or if a power outage occurs, easily reach customers with updates. Apps also can give users real-time information on their daily and year-over-year energy use so they can see how their behaviors affect their energy bills each month. If a customer has particularly high energy use one month, the utility can push that customer a notification alert about a potentially high electric bill and offer tips to reduce high energy use.
Utilities also can use demand response tactics to engage customers. During peak hours, utilities can ask customers to conserve energy through texts, phone calls or apps.
Opower found that simple practices such as phone calls that ask residents to conserve energy resulted in as much as 5 percent reduced demand on peak days.
An even greater impact can be achieved with more specific recommendations or an interactive app that lets people turn off energy-consuming devices remotely when notices come while they are away from their homes.
Gamification is More Than Fun, Games
People are motivated by recognition and rewards, so making gamification central to a utility’s HEM strategy is key. Gamification ties education and technology together to help customers change their routines. Its offers immediate feedback, goals, points, rewards and competition.
Gamification can take many forms. A video game-like experience-perhaps a character’s exploring a house and finding all the phantom loads-works well for people who enjoy earning points and achievements. A hands-on game that encourages people to interact directly with their home appliances, like counting all the plugged-in appliances in their homes, might be better for families with young kids. The most effective gamification strategies employ various activities that help preserve the novelty of the program and continue to push users to discover new information and ways to curb their energy use.
Utilities can add a competitive element by featuring a leaderboard that shows neighbors’ top scores and compares energy use to those within a certain geographical area. Creating games geared toward children and young adults also can get entire families involved in HEM and educate future generations on energy-saving behaviors.
Engaging customers in HEM is the only way to reduce energy consumption collectively. As technology advances and customer needs change, utilities must follow and adjust their strategies to meet those needs. Through education, interactive tools and gamification, utilities can begin the shift toward a generation of energy-conscious consumers.
Today’s utility customers are different from those in the 1980s, 1990s and even the early 2000s.
Gene Wang is CEO and co-founder of People Power, a software company enabling remote control and management of connected devices from smartphones. Wang previously was chairman and CEO of Bitfone, an industry leader in mobile phone device management. He has a bachelor’s degree in computer science from the University of California at Berkeley. Reach him at [email protected].