The climate crisis is impacting utilities through many different avenues – from project financing to consumer expectations to regional clean energy initiatives. Top-level influencers, including investors and government officials, are pressuring utilities to mitigate climate risk by adopting renewables and evaluating infrastructure vulnerabilities. Consumers are also increasingly prioritizing smart home features and becoming more conscious of the climate crisis, all while cities set ambitious clean and renewable energy targets.
As a result, utilities are adapting their business models, in part by driving smart home technology adoption and offering customers rebates on devices they might not otherwise be able to access. Connected homes can simplify consumer lifestyle choices to help them be more sustainable, and by lowering the affordability barrier to purchasing smart home products, utilities are positioning themselves as champions of the smart home and climate movements.
The climate crisis is THE catalyst for modernizing the utility business model
Utilities have been supplying power to peoples’ homes affordably, safely and reliably since the early 20th century. However the climate crisis is changing financing mechanisms and investor priorities, particularly in relation to our infrastructure, causing a trickle-down effect that is impacting utilities’ business models, services and resource development.
Investors are demanding greater transparency and disclosures around how utilities are reducing risk amidst a changing climate and a growing number of cities are announcing ambitious climate action plans, causing utilities like Duke Energy to look at green bonds to fund new clean, renewable and resilient infrastructure. Furthermore, utilities need to adjust in order to engage sustainably-minded consumers. According to a Smart Energy Consumer Collaborative study, more than 25 percent of Millennials have shown willingness to pay as much as $3-4 more per month just to get their energy from renewable sources. Utilities’ consistent role in peoples’ lives now puts them in the position to transform how they deliver power to meet these modern-day requirements for innovation, emission reductions, customer engagement and environmental responsibility.
Utilities are driving smart home transformation
Leading utilities are already embracing this changing landscape by driving greater access to smart devices, which provide more energy and cost savings for customers and utilities alike. Parks Associates reported that 45% of smart thermostat owners received a rebate on the device from their energy providers, which shows that smart home product discounts and rebates lower the barrier to adoption and increase the role of energy and utilities in the smart home ecosystem.
To build off of this success with smart thermostats, rebates are now being applied to other devices like smart speakers – now the fastest growing consumer technology since the smartphone – and voice controlled devices. Xcel Energy and Google Nest have offered smart device services since 2015, including access to programs like Seasonal Savings, product rebates, and now Xcel’s Google Assistant Actions with bill pay commands. This partnership is an example of how utilities of the future are adapting their offerings to keep up with changing expectations for service.
Utilities are including all customers in the smart home journey
Utilities are also going great lengths to put energy-saving technology into the hands of those who need it most. They have an “obligation to serve” and are uniquely motivated to provide services to all individuals requesting them in their area, including low-income households, disabled individuals and seniors. Initiatives like the Power Project are delivering smart thermostats to low-income households, a segment that’s been hard to reach.
Seniors represent another customer group that is not known to be tech savvy or easily accessible, but stands to benefit greatly from the connected home. Parks Associates reported that 13% of seniors 65+ and 30 percent of caregivers consider voice control a must-have feature for an independent living system. The adoption of smart home technology will enable utilities to better address the specific needs of these underrepresented groups, as well as react to watershed moments in history such as the climate crisis.
Utilities must continue to show leadership in driving adoption of energy-saving technologies to address a myriad of challenges and changes resulting from the climate crisis. They’re already exploring alternative funding mechanisms to deploy clean infrastructure, and have deployed successful programs to increase access to smart thermostats. They’re also expanding their offerings to include other smart devices, like smart speakers and voice controlled devices, to increase their customers’ energy-saving capabilities. These new initiatives aim to be as inclusive as possible, benefiting all types of customers and their unique needs. In partnership with organizations and technology companies, utilities can continue to scale the transformation of the smart home to meet climate goals.