How to innovate in the dynamic energy landscape

How to innovate in the dynamic energy landscape

In today’s rapidly evolving energy sector, utilities are facing a number of challenges—including increased demand, grid constraints, and ambitious decarbonization policies—while trying to maintain affordability, reliability, and customer satisfaction.

Utilities need to innovate to address evolving demands, maintain customer satisfaction, and meet energy savings goals. Successful utilities will go beyond the old, easy solutions and come up with new ways to involve the harder-to-reach parts of their customer base.

So, what are some of the innovative tools, technologies, and tactics where utilities can see success?

Customer engagement

Customer expectations have undergone a significant transformation in the last 15 years. Influenced by personalized experiences from companies like Netflix, Amazon, and even local grocery stores, customers now expect the same level of customization from their utility providers.

The methods of customer engagement have changed significantly as well. The growth of smart phones, targeted advertising, and even social media has had an impact on customer expectations for marketing and messaging. Utilities must continually innovate to meet these heightened expectations and provide seamless, tailored customer interactions.

What this looks like on a tactical level is using data analytics, behavioral science, and diverse communication channels to reach and motivate customers. One-size-fits-all marketing strategies or using the same messages that were effective a decade ago won’t work today. Out-of-the-box thinking is needed to reach the right audience at the right time with the right message.

Baltimore Gas and Electric (BGE) is one company doing this exceptionally well. They’ve deployed campaigns with really creative imagery and leveraging social media influencers on channels like Instagram—reaching customers in ways that utilities haven’t traditionally used.

Program design

The rapid evolution of energy codes and technology further underscores the need for innovation. Consider the lighting market's transition from incandescent bulbs to CFLs to LEDs, and now to a stage where rebates are no longer necessary to encourage customer participation. Any new utility programs must similarly stay ahead of the curve. As baselines rise, achieving the same level of energy savings as a decade ago becomes more challenging—demanding new, creative solutions.

Innovation in utility program design should include piloting new technologies, sharing best practices, and motivating customers to adopt energy-efficient solutions through new channels like loyalty and rewards programs. In addition, utilities need to be willing to meet customers where they are on their decarbonization journey, whether that’s buying an electric vehicle, electrifying their heat and water, or installing solar panels.

Take a look at Pepco’s award-winning Residential New Construction New Homes program. It consistently exceeds targets despite evolving market conditions and increasingly stringent building codes. In addition, they are providing new options for builders who begin to transition away from fossil fuels.

Demand response

The proliferation of distributed energy resources (DERs) like solar and storage helps add renewable energy to the grid and thereby helps utility companies achieve their greenhouse gas (GHG) reduction goals. However, DERs also require enhanced coordination to maintain grid reliability.

Here, utility innovation is about designing programs that balance customer comfort, convenience, and control with grid needs and climate goals. Beyond using communication strategies to influence when and how customers use electricity, utilities should actively solicit—and listen to!—customer feedback through surveys. A willingness to continually evolve these programs is crucial when the market is rapidly transforming, and customers expect their opinions to be heard.

SMECO’s innovative approach to evolving demand response encompasses a variety of approaches from traditional switches and thermostats to bring-your-own-devices, optimization, and the latest smart home technologies.

Leaders from BGE, Pepco, and SMECO shared more detail on their innovative strategies that are driving transformative results in this on-demand video.

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Meet the author
  1. Justin Mackovyak, Vice President, Utility Program Implementation

    Justin leads program implementation and strategy for clients in the Mid-Atlantic region with more than 15 years’ experience. View bio