by Abhay Gupta, Bidgely
With IPOs, acquisitions and product launches every week, it can feel like the home energy efficiency market is finally having its day in the sun.
Opower has laid claim to the utility efficiency space with a successful IPO and growing customer base, and Nest has brought home energy management into the public eye with compelling consumer products that attracted a $3.2 billion acquisition from Google.
At the same time, recent Environmental Protection Agency regulations that mandate states reduce emissions by 30 percent have renewed attention to energy efficiency and demand response at the policy level.
Consumers have shown increasing interest in the comfort, convenience and cost gains to be had from energy efficiency. And utilities have started to recognize that energy efficiency programs and technologies help them achieve goals and are key to deepening customer engagement in an increasingly competitive energy landscape.
Despite this significant progress, convincing utilities and consumers to invest in new appliances or devices remains a challenge.
We still have obstacles ahead of us before we achieve the efficiency gains the smart grid promises.
From Information to Motivation
Some 150 million smart meters exist in the field, and they deliver massive amounts of interval energy data to utilities.
The first wave of energy solutions allowed utilities to use this data by presenting customers with basic information about their energy use.
Without any analysis, comparisons, context or recommendations, information alone is not useful. Some energy enthusiasts used this information to cut their energy use significantly, but early programs made little progress toward achieving broader customer engagement and increased efficiency.
Then came the second wave of energy solutions, which built on the initial programs to develop basic analysis designed to motivate customers to reduce energy use. Using neighborhood comparisons informed by behavioral economics, customers competed to reduce energy use by an average of 1.5 to 3.5 percent per home.
The second wave of energy efficiency made advances in efficiency. Now, the industry is beginning to translate big data into significant energy applications.
The THIRD Wave: Empowerment
The third-wave solutions build on the momentum of existing technologies to provide more powerful insights that drive long-term behavior change and substantial engagement.
Rather than only motivating customers, these solutions go beyond comparisons to empower customers with detailed energy use unique to each homeowner, allowing them to take energy use into their own hands.
Cloud-based energy disaggregation represents the heart of the third wave.
This technology enables utilities to measure how much energy each home appliance consumes and then make personalized, specific recommendations to their residential customers about behavior changes, appliance upgrades or building renovations.
With deeper data on consumer behavior, utilities can deliver targeted recommendations that best benefit customers and help meet goals.
Delivering Value to Utility Customers
Consumers are accustomed to technology and devices that provide a tailored, personalized user experience, regardless of service.
Nearly every successful consumer service illustrates the demands of today’s connected consumers-from personalized music streaming to movie recommendation engines to book reviews from only similar readers.
Energy disaggregation brings this personalization level into homes. For the first time, customers are deeply engaged because they can see exactly where they use electricity and where they are efficient and inefficient. Disaggregation gives customers the useful, dollar-based recommendations they need to decide on behavior changes, appliance upgrades and home improvements.
Disaggregation supports engagement and energy efficiency in several ways. First, research shows that saving money, primarily, motivates consumers. When they understand the direct connection between cost savings and specific behavior changes such as running fewer loads of laundry or unplugging unused appliances, they are far more likely to make and sustain those minor lifestyle adjustments.
Second, disaggregation allows consumers to target the appliance upgrades that will make the greatest impact. Consumers know exactly how much money they would save by investing in new refrigerators or clothes dryers and can make informed choices about home appliance upgrades.
Third, some new disaggregation technologies even can be trained to identify appliances-a process that encourages teaching kids and making energy savings a family effort. The possibilities are tremendous.
Last, consumers better understand the building envelope upgrades that will make the greatest impacts on their energy bills. For example, disaggregation can identify the homes that will benefit most from solar energy-useful information for customers and a source of qualified leads for solar energy companies.
|Bidgely’s HomeBeat provides personalized insights unique to each user’s appliances and consumption, as well as neighborhood comparisons for the particular appliance or energy category.|
Access to better energy data is critical to unlocking this third wave to empower customers. Green Button data is a key first step that provides 42 million homes with basic energy use data in 60-, 30- and 15-minute intervals.
Emerging sources of highly granular, “high-def” data, however, can unlock far greater energy savings than today’s solutions. Installing an energy gateway or monitor in homes is one way utilities can gain access to high-def data that enables even deeper insights through disaggregation.
An energy gateway can sample data as frequently as every 6 seconds. The increased sampling rate allows some disaggregation software to identify more appliances and track energy use with greater accuracy-a critical difference in even deeper engagement with customers, generating more personalized recommendations. Consumers can install high-def energy gateways in minutes at a fraction of the cost of smart meters and even below the cost of a plug sensor used for a single appliance.
Delivering Utility Benefits
For utilities, disaggregation drives energy reduction and produces insights about customer behavior that yield deep, sustained customer engagement.
First, utilities can segment their customers more effectively. Today, utility solicitations to customers often are generic and irrelevant because segmenting customers is too difficult and costly. With specific insights into how energy is used in each customer’s home, energy disaggregation enables utilities to laser target the best matches for each program.
For instance, it can help identify customers with inefficient pool pumps who stand to reduce energy use the most through a rebate program. Disaggregation also can identify the customer appliance usage patterns that are most appropriate for a new rate plan, time-of-use rates or demand response event.
Disaggregation enables utilities to engage with customers like never before. Instead of receiving irrelevant marketing materials, customers receive a free, easy-to-use portal and apps that deliver a tangible benefit with personalized recommendations. This can move a utility from a faceless power company to a helpful company that actively improves a customer’s life.
As an example, Bidgely’s engagement solution combines disaggregation with personalized recommendations to produce high rates of customer engagement and favorability metrics: 90 percent of customers checked in to the technology weekly, and 85 percent would recommend the technology to others.
In addition, the solution has been shown to reduce whole home energy use an average of 6 percent-three times greater than second-wave solutions.
The latest innovation adds solar disaggregation to track solar power generation and provide a holistic view of total, net and component energy use for solar customers. Utilities have requested such a unified home energy snapshot of both grid and solar use to re-engage with their solar customers. As more customers install solar energy and competition among energy providers continues to increase, deepening customer relationships with services that embrace distributed generation will be increasingly critical for utilities.
Achieving the Promise of the Smart Grid
For the most part, utilities have invested significantly in smart meters and automated meter-reading networks. Understandably, they often hesitate to layer additional deployments on top of their initial investments without tangible customer benefits.
Third-wave solutions can be deployed with no hardware infrastructure costs, thanks to cloud computing advancements. Cloud-based intelligence eliminates or minimizes additional hardware investment and ensures longevity, compatibility and scalability as requirements evolve. Overall, utilities can leverage their existing metering investments cost-effectively and bring smart grid benefits to customers.
Companies are working to ease integration across utilities so millions of consumers can benefit from these solutions soon. For example, Bidgely’s Freedom Summer program offers disaggregation technology at no product cost to utilities for up to two years. The program generates savings equivalent to millions of dollars that otherwise would have been spent on efficiency programs. Just like the freemium model that’s been successful in the software industry, this new model enables utilities to deploy new technology broadly with higher confidence and lower risk.
Consumers expect a highly personalized, customized experience from all service providers, and utilities are no different. Tremendous progress has been made in the utility industry during the past decade to meet this new standard. With third-wave solutions, data and technology, utilities can deliver more insightful programs to engage customers, achieve goals more easily, improve efficiency and build long-term, powerful customer relationships.
Abhay Gupta is CEO and founder of Bidgely. He’s worked at energy and technology companies including Grid Net, Echelon and Sun Microsystems. He has a B.Tech from the Indian Institute of Technology Delhi, a master’s degree from The University of Southern California and an MBA from Santa Clara University.
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