There are only so many lightbulbs to change. Then what’s next? The field of energy efficiency is evolving, and this is another reason utilities need to innovate. The up-side of this situation is that while utilities are best positioned to drive energy efficiency innovation, they also stand to gain significantly from it.
Energy efficiency (EE) is the optimization of behaviors and technologies to maximize what a given amount of energy can accomplish. It is, “the ability to maximize energy use… throughout the electric utility system,” as the American Public Power Association defines it. Even more concisely it is, “using less energy to perform the same task,” per the Environmental and Energy Study Institute. But in the utility context, it usually refers to both utilities and their customers, and it usually requires both new equipment and new behaviors.
Utilities, customers, and the general public benefit from greater energy efficiency. Demand for energy efficiency is high. For instance, the EPA reports that, “As of 2017, nearly 90% of the nation’s top homebuilders build Energy Star certified homes.” A Utility Dive article captured the EPA’s 2015 rate of new Energy Star homes at 88%, so the importance to utility customers is, if anything, rising slightly.
What are utilities already doing and how can your utility improve energy efficiency even more?
As long as technological advances continue to allow customers to get more from their electricity, there will be a need to upgrade homes, commercial buildings, equipment, and devices to leverage that benefit.
One way that utilities get more efficient customers is by helping them upgrade appliances — usually using rebate programs | link to appliances page]]. Many, many utilities are already doing this. EnergyStar.gov's list of rebates holds around 2,700 (2,683) appliances at the most recent check.
The spread of such rebate programs since the 1980s and to near-ubiquity today, reveals their effectiveness at reducing power consumption, and they may remain important for decades, but [[next-level strategy is mandatory for next-level energy efficiency gains | link to appliances page]]. With an important exception discussed below, only appliance replacement with more efficient models can help a utility and its customers realize gains in efficiency. In general, additional appliances, however efficient, cannot reduce consumption.
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One class of new devices can generate a net decrease in consumption is smart home devices. These devices use the IoT for home automation, and they can save significantly more energy than is required for them to run. For instance, independent and internal research has found that, “the Nest Learning Thermostat saved US customers about 10-12% on their heating bills and about 15% on their cooling bills.”
Smart devices are helping utilities with demand response and customer satisfaction. International business consultancy ICF reports that, “In a recent pilot,” study they conducted, “smart thermostats were able to reduce runtimes by up to 95% during summer demand events while maintaining a customer satisfaction of 86%.”
The Nest thermostat can also talk to utilities and in partnership with utilities, it is offering incentives for customers to participate in demand response management programs. One of these has, “helped achieve a 55% reduction in energy use during peak times,” according to an article by Power Magazine.
Thermostat-based demand response is not new though. A 2018 report by the PLMA Thermostat Interest Group, notes that, “Utilities have been administering thermostat-based DR programs for many years.” So from the utility side, the smart thermostats may be an improvement in customer appeal, etc., but there is still plenty of room for innovation.
Learn more about energy efficiency appliances »
Bring your own thermostat, or BYOT, refers to, “customers purchas[ing] device[s] that work… with utility and vendor programs to manage usage,” as Utility Dive describes it. As Utility Dive noted in the article above, price was a factor in adoption of home automation technology. And as Greentech Media mentions, utilities are already using rebate programs to encourage customers to install these devices.
The PLMA report says, “Thermostats [are] an increasing share of DR enabling technology, and BYOT [is] an increasing share of how thermostats are acquired for DR programs.” So, will your customers begin buying their own communicating thermostats en masse within the next three years? Maybe. Sudden exponential growth is a common adoption curve for new technologies.
Credit: Hall, Bronwyn and Khan, Beethika. “Adoption Curve of New Technology,” New Economy Handbook. University of California Berkeley.
While the possibilities are exciting, the customer still has to use the technology properly to see an improvement in efficiency. And many of the most advanced IoT/Smart Home devices require informed configuration or even learn the habits of its users for better or worse. So even with rebate programs and equipment upgrades, utilities must go beyond BYOT and appliance-replacement to reach the next levels of energy efficiency.
Behavior-based energy efficiency is about individual, household, and organizational decision-making and habits. “Behavior based energy efficiency (BBEE) programs focus on energy savings resulting from changes in individual or organizational behavior and decision-making,” says a Bonneville Power Administration report, “BBEE programs have been growing in prominence around the [USA] as a means of achieving energy savings beyond what is obtained through traditional efforts focused on encouraging the adoption of energy efficient technology.”
BBEE is inexpensive and compliments other strategies to reduce energy use. Unlike bulbs and appliances that must be replaced and may be replaced with cheaper, less efficient alternatives when they wear out, good habits can go on saving energy for generations. Even the smartest devices need to be used properly to deliver the promised gains in efficiency. This is where behavioral energy efficiency comes in.
Communications as basic as a monthly energy use report comparing customer power consumption to similar households can lead to a significant improvements, “On average, when informed that they use more energy than a similar home, people will take steps to reduce their consumption and across a population households can save 1-3 percent. Over millions of households this adds up to a significant reduction in energy consumption,” according to the US Department of Energy’s State & Local Energy Efficiency Action Network (SEE Action).
Good habits also address additional and deeper motivations. Behavioral energy efficiency draws upon motivations beyond the financial. Tapping into additional motivational factors, says SEE Action, utilities can realize significant reductions in consumption.
Learn how Brilliency helps your customers to better understand energy saving programs with a more effective customer engagement strategy »
There is no need to stop at providing a monthly report in the Digital Age, especially when more and more customers expect digital interactions. A growing base of customers is also motivated by and willing to engage with businesses when it is social, challenging, and fun. Gamification is not a reward program that provides incentives for actions. Though some may incorporate a prize of some kind, notes an American Council for an Energy-Efficient Economy (ACEEE) report on utility gamification. With gamified solutions, social, competitive, and fun factors are the only, or most important motivators.
The fun of a gamified solution is the spoonful of sugar for the medicine of energy behavior change. According to the ACEEE report, which analyzed 53 games that were or could be used by utilities, the medicine works: “the evidence suggests that games definitely can encourage positive behavior change.”
In fact, it works surprisingly well. As we noted above, 1-3% is significant aggregated across a large group, such as a city, county, or all of a utility’s customers. Gamified solutions start at the top of this range; 3% is just the beginning. The ACEEE found, “Available evidence indicates that gamified energy efficiency programs can achieve energy savings of 3–6% among a sizable number of participants. Savings of more than 10% can be achieved in narrowly targeted programs.”
See how your customers can play an important role in your EE strategy with Brilliency’s software and gamification platform »
Brilliency is a consumer engagement platform that helps utilities understand their audience and connect with them in a meaningful way. Brilliency is simple to use and allows consumers to better manage their home or business utilities. After an easy one-time setup, they use the app to see their consumption over time, learn strategies for improving energy efficiency, report an outage and connect to pay bills — one place for all their utilities right in the palm of their hand for the utility.
Brilliency helps you better understand your consumers. You can customize the interaction you have with them by using rewards-based incentives, getting information that matters to you; things like:
Brilliency also allows them to interact with consumers more easily, issue timely alerts, send energy savings tips, roll out new energy efficiency programs and communicate with them so they stay informed and happy. It all adds up to a better experience for the utility and the consumer.
Brilliency transforms the relationship between utilities and their commercial and residential consumers. Our cloud-based engagement platform increases energy efficiency and delivers behavioral demand response. Feedback loops with the consumer encourage learning, conservation and action through its game-based platform.