19 things utilities need to know about Accenture’s 2015 report on energy consumers
In July, Accenture released a new installment of its sweeping annual report on energy consumers. The study — The New Energy Consumer: Unleashing Business Value in a Digital World — reflects more than 11,000 interviews with homes and businesses in 21 countries, and offers a slew of actionable insights to help utilities adapt to rapidly evolving landscape.
You can download the report here. Keep reading for 19 of the most interesting data points that energy professionals need to know.
Trends in digital engagement
This year’s New Energy Consumer report centers around digitally engaged consumers — a group that Accenture defines as people who have interacted with their utilities online at least once during the past 12 months.
There’s a good reason the research focuses on web and mobile interactions. Digitally engaged customers are more valuable customers. Utilities that can move homes and businesses to online self-service will reap the rewards — from higher satisfaction and loyalty, to lower service costs, to new revenue streams.
Here’s what Accenture found.
1. Just 44% of utility customers are digitally engaged.
Accenture asked thousands of consumers whether they had interacted with their utilities online in the past 12 months. Less than half said yes.
2. Why? Because many digital experiences are difficult.
From Accenture: “The number one reason customers would want to use their energy provider’s digital channels is quick, convenient service. Yet, 41 percent of consumers believe their digital experience with their energy providers is more difficult than with other types of providers.”
3. Utilities need to make digital self-service easy.
To motivate more customers to do business online, utilities need to prove that it’s the easy, obvious choice — better than a call center, and better than paper mail.
That means using data and analytics to create personalized experiences that anticipate customer needs. It also means using customer-centric design to create “digital experiences that are simple, innovative, and empowering for customers.” (We agree.)
4. Digitally engaged customers trust their utilities.
Why does digital engagement matter? Because it’s a leading metric for all kinds of important outcomes.
One of them is customer trust: 41 percent of digitally engaged customers say they trust their utilities to help them optimize their energy use, compared to just 31 percent of non-digital consumers.
5. They’re also more satisfied.
There’s a whopping 14 percentage point gap in overall satisfaction between utility customers who use digital channels and those who don’t. Seven in ten digital consumers say they’re satisfied with their energy providers.
6. And they’re 3x more likely to recommend.
Digital engagement is a critical outcome for utilities in any market, but competitive utilities may have the most to gain. Accenture found that 42 percent of digitally engaged customers would recommend their energy providers. Among people who don’t use digital channels, that number is just 13 percent.
7. Digital consumers participate in more programs.
Take home energy management. A full 80 percent of web and mobile users — four out of five — say they would participate in an efficiency program, compared to 59 percent of non-digital utility customers.
Similarly, Accenture reports that digital consumers are 1.4 times as likely to sign up for home energy generation products, like rooftop solar panels.
Want to dive deeper into success approaches to digital engagement? Check out this case study from E.ON UK.
The utility of the future
We’ve written before about the forces that are reshaping utility business models. In Europe and the United States, demand on the grid is flattening out for the first time in history. Worldwide, new technologies are giving consumers more control over the energy they use, and how much, and where it comes from, and who generates it. Solar, storage, and smart grid products are inviting new competitors into the marketplace, and utility deregulation is introducing competition within it.
The bottom line is that growth won’t be a sure thing in the 21st century. So utilities are looking for ways to adapt — to boost revenue, lower costs, retain customers, and redefine their value propositions.
Each utility’s approach will be different, but the large-scale trend will be a pivot from selling electrons toward selling services.
Accenture’s report supports that idea — and emphasizes that consumer demand is already mounting. “Driven perhaps by technology convergence or consumers’ broader view of the energy ecosystem, consumer interest in signing up for energy-related products and services appears to be gaining momentum across the board — with more than half of consumers interested in a wide range of products and services from their energy providers.”
8. For competitive utilities, the opportunity is clear.
From efficiency upgrades, to distributed generation hardware, to home energy audits, Accenture found widespread consumer interest in new products and services. For proof, look no further than the chart above.
Accenture is quick to point out the opportunity for utilities in competitive markets: “to create significant new revenue streams by offering additional home-related products and services, extending the value proposition to dual fuel and providing financing plans or maintenance services.”
9. Regulated utilities have a lot to gain, too.
Accenture continues: “in a regulated marketplace, opportunities also exist for utilities. Consider innovative partnerships or information services as a way to create more value for consumers — and extend the mindshare for energy-related products and services.”
10. A new market means new competitors.
Consumer interest in new energy management solutions has already pushed companies like Apple and Google to make a play for the smart home. Accenture cites “a growing list of blue-chip vendors… [who are] partnering with incumbent hardware and software providers to develop home Internet-of-Things ecosystems.”
11. Digital-only energy retailers are jumping in, too.
Unburdened by the regulatory standards and legacy infrastructure of traditional utilities, purely digital retailers are popping up in competitive markets. They’re seeing some success: by offering customers modern web and mobile experiences, and compelling energy packages, digital startups are achieving higher satisfaction rates and lower service costs.
12. Utilities can take competitors’ approaches and deploy them at scale.
Accenture breaks it down well: “By nature, digital startups benefit from the proverbial clean slate. Able to design internal operations and processes around consumer needs, they can choose where, when and how to automate transactional processes… In the United Kingdom, for example, the number of retailers has been growing, with some playing the market by buying energy in the spot market and then passing those savings on to consumers. Not every utility can be a pure digital retailer, but almost every provider can learn from how these retailers interact with their consumers.”
The fact is, homes and businesses trust their utilities more than any other energy service provider. By adapting to customers’ changing preferences — offering helpful digital experiences and new energy choices — utilities can solidify their customer relationships and lay a foundation for success in the decades ahead.
Trends in technology
Throughout the New Energy Consumer report, Accenture shares data on customer attitudes toward new technologies.
The trend that emerges is one of choice. As solar panels, electric vehicles, storage batteries, and smart devices become increasingly affordable and ubiquitous, customers will have more opportunities to personalize their energy use.
Here’s Accenture: “In short, all consumers have opportunities to play a more dominant, pivotal role in the energy ecosystem. They enjoy growing choice around the source of their electrons — wind, solar or even landfill generation — and, in competitive markets, they can select their energy provider. Personalized energy will continue changing how consumers interact with utilities and, ultimately, how a utility runs its business.”
13. One in two consumers is considering rooftop solar.
In last year’s New Energy Consumer survey, just nine percent of respondents said they had solar products at home. But today, the majority of consumers — 55 percent — are considering buying or leasing them within five years.
That’s mostly because solar panel prices have cratered. Deutsche Bank expects residential solar to achieve grid parity in every American state next year, and 80 percent of global markets by 2017.
14. People are happy to get solar from their utilities.
Consumers might have a slight preference for dedicated solar providers, but if that bias exists, it’s very small. Seventy-one percent of the people Accenture surveyed said they’d be comfortable buying or leasing solar from their utilities.
15. Down the road, they’ll also need EV services.
Industry analysts are confident that demand for electric vehicles will spike upward in the next five to ten years. Accenture reports that more than half of consumers are considering an EV for their next car purchase — which, as we wrote last year, represents a big opportunity for utilities to smooth out their load curves, encourage time-of-use pricing, and deepen their customer relationships.
16. Consumers are most interested in automated charging.
When you ask customers which electric vehicle services they’d like their utilities to offer, you hear a wide range of answers. The most common response is a combination of time-of-use pricing and automated charging: 42 percent of utility customers express interest in a solution that fills up the EV battery when power is cheapest. A comparable fraction say they’d like their utility to install charging stations in their homes.
17. Utility executives are bullish about microgrids…
In Accenture’s 2013 survey, just 35 percent of utility leaders said they expect to see growth in microgrid development over the next five years. In 2014, 66 percent held that view.
18. …but consumers don’t know what they are yet.
Just one in three utility customers say they know what a microgrid is.
Accenture sees this as an opportunity for utilities to step in as advisors. “Engaging prosumers to advance their knowledge and understanding of distributed energy resources will become increasingly important as these solutions are proliferating… As more consumers become power generators and the traditional one-way flow of power becomes bidirectional, more complex and interactive relationships with consumers are required.”
19. Peer-to-peer energy could be around the corner.
Looking a little further down the road, Accenture speculates that some utilities will use software to position themselves as facilitators for buying and selling energy.
“In much the same way that Airbnb’s platform disrupted the hospitality industry by directly connecting hosts and travelers, platforms will enable neighbors to buy and sell power directly from each other. As more energy solutions emerge, consumers may shop around for the best deal on their electricity, especially if local generation offers a more compelling value proposition. Utilities have an opportunity to decide whether to participate and what role they will play in maintaining platforms or otherwise facilitating these local, peer-to-peer transactions.”
What does Accenture’s report add up to?
No one survey will foretell the industry’s future. But Accenture’s research offers a snapshot of where innovative utilities will take their customers in the years ahead.
In a world where it’s not enough to sell electricity as a commodity, energy providers will use digital channels to show homes and businesses a host of new products and services. Data analytics will ensure those offers are well targeted. Over time, consumers will personalize more and more of their energy experience. Some will come to see their utility less as a provider, and more as a platform — a trusted resource that connects them to a diverse ecosystem of technologies and services.
Every utility’s path will be different. Opower exists to make the journey easier. Take a moment to explore our latest technology — a web toolkit that makes it simple to embed data insights across the entire utility web portal.