Frictionless Energy: How Energy Companies are Finally Putting Customers First
- Jul 8, 2014 7:00 pm GMT
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Energy companies are often likened to tech companies. They share many of the same investors, are often based in tech hubs like the Bay Area, and usually emphasize innovation.
Yet renovating our energy infrastructure requires a different suite of tools than developing a consumer or business app, website or piece of software. Energy companies usually must move people, install equipment, seek permitting, and integrate with older technologies—it’s far more legwork than downloading software and undergoing a little training. As a result, the energy adoption curve is traditionally less amenable to viral growth.
Still, there’s no avoiding that tech companies are racing to make life as easy as possible for the modern citizen, and we’ve grown accustomed to doing a good deal of business with a click. Energy companies are starting to applying best practices from the tech industry to meet this high standard.
Think of it as going from an infrastructure-first approach to a customer-first approach. Asking customers to put up with extra phone calls, stay home from work to manage contactors, undergo trips to the permit office and self-arrange financing will only get the committed few. True mass appeal will arrive when homeowners can go solar with a few taps on their phone.
A few examples underscore how energy companies are making strides in eliminating these friction points—and greatly expanding their market.
In the bad old days, going solar was usually a major headache, requiring permits, construction approvals, and tens of thousands of dollars of cash up front. Solar companies have achieved meteoric growth by streamlining their sign-up processes with simple financing, permitting assistance and more. This isn’t limited to residential solar; Antenna client REC Solar just announced a new partnership that enables them to slash engineering time for commercial solar proposals by more than 65%.
Equally exciting—and even easier to adopt—is the burgeoning business of community solar. Going solar previously required that you were a homeowner with no shade, instantly eliminating 70% of the residential market. With community solar, a quick signup gets renters and tree lovers renewable energy, all while eliminating the hassle of permitting, installation and financing.
Smart thermostats mark another drastic improvement in ease of use. I have childhood memories of my dad agonizing over programming the confusing home thermostat, an exercise most often resolved with a cocktail and orders to put on a sweater. New smart thermostats ditch those dad-stymying clunky keypads for simple touchscreens, with additional functionality available via web and mobile apps. Many incentivize efficiency energy use (Nest famously rewards users with a green leaf when they’re saving energy), while others, like Carrier’s ComfortChoice, tie in with utilities and home energy management systems like Antenna client CEIVA Energy to support utility engagement, demand response and efficiency programs.
As home heating and cooling can represent over half a home’s energy bill, smart thermostats can make a major dent in energy use, and they make a wall look stylish as well. The approach has paid off: in a major coup for a nascent company, Google acquired Nest for $3.2B last year.
Lastly, utilities have long been derided for making customer interaction the equivalent of enduring an IRS audit combined with a root canal while listening to death metal. Consider comments from Greg Guthridge, managing director in Accenture’s utilities industry group, which recently published a compelling report on the new energy consumer: “Many utilities still compare their service levels to other utilities, but our research shows that they need to look to other providers’ digital experiences. Energy providers need to take the hassle out of customer interactions and make them as simple, accessible and convenient as possible.”
Finally, there are glimmers of hope. New initiatives, like Marin Clean Energy, make switching to renewable energy as easy as ticking a box. Granted, the utility industry has a long way to go to make these practices commonplace—even progressive San Francisco’s proposed renewables plan is stalling—but this is a promising start.
You may be asking why it took energy companies so long to figure out that courting customers is key to growth. That’s fodder for another blog post, but in short energy sectors have often had monopolies on technology that made the market come to them (think utility grids, solar technology, expensive building management systems, etc). That’s changed as the market has grown more competitive and prices have come down, and the infrastructure-first approach is dying with it.
Instead, today’s most successful companies across industries put the end customer first. That seems basic to many of us—especially those of us in the services business—but it’s a new approach for energy companies, and one that leaders have already started to master.
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