Lifestyle Approach Seen Luring Consumers to Energy-Saving Features

SAN ANTONIO -- Lowering a utility bill isn’t likely to be the near-term driver that engages consumers in adoption of home energy management services, said panelists at Parks Associates’ Smart Energy Summit. “Consumer interest in saving energy appears to have waned some over the past couple of years,” said John Barrett, director of consumer analytics at Parks.

When the economy was in poorer shape and consumers were more sensitive about budgets, they were more interested in saving money on home energy use, “but now that’s dropped down,” Barrett said. Some customers have average utility bills of “only $50 a month, so if they save 10 percent that’s only $5, and that’s not worth the trouble,” he said. On the opposite end of the spectrum are high-income households with “limited interest,” in monitoring energy usage, he said.

That has led the energy management industry -- including utility companies, service providers, dealers and hardware and software companies -- to explore “non-economic” benefits of home energy management systems such as convenience, Barrett said. Reliant Energy, an energy retail company owned by NRG, has tapped into the collective convenience mood and is running a commercial that shows homeowners the benefits of a connected home management service that sends text messages to notify homeowners of changes in the home’s electricity usage. In the commercial, vacationing parents are notified by Reliant’s Account Alert service of a spike in their home’s energy usage, triggered by what the parents realize is their teenager throwing a party while they're out of town. The commercial carries an “implied” message about energy management, but “it’s more about busting my kid,” a different kind of energy management, Barrett said.

At Arizona utility Salt River Project, “snowbird” customers “aren’t necessarily interested in saving money,” but want to be able to check in on the status of their property when they're not home, said Renee Castillo, senior director-customer services. “They find that valuable,” she said. For Southern California Edison, “everybody wants it,” said Brad Cherry, home area network readiness senior project manager, referring to lower utility costs, “but it’s not the thing.” Energy savings has to be part of a lifestyle services offering for customers to participate, he said.

Saving money is a “secondary effect” of home energy management services for utility customers who use home energy report services from third-party provider OPower, according to Roderick Morris, OPower senior vice president of marketing and operations. Utility companies can reap the benefits of customers engaging in programs that reduce energy usage -- a more cost-effective path for utilities to employ to meet increasing energy demand versus building a new power plant -- “but you're not effective in getting those savings with a savings message,” he said. That finding is consistent regardless of demographic or socioeconomic group, he said.

Even in Europe, where electricity costs are double those in the U.S., electricity providers still lead with a lifestyle message in marketing to consumers, said Greg Memo, CEO of Greenwave Reality, which provides home energy management, connected lighting and home monitoring services to utility companies in Europe and the U.S. Customers “love the idea of the smartphone being able to control the home,” he said. While energy is mentioned in commercials for the Greenwave service, he said, “even in places where electricity is really expensive and there’s a lot more awareness, we still see lifestyle as a bigger deal."

The easier it is for customers to engage the cost-saving benefits, the more likely they'll use services that save them money, said Ted Reguly, director-customer programs and assistance for San Diego Gas & Electric. SDG&E has used the real-time information available through smart meters to show consumers their energy usage in dollars and cents. Following the utility’s smart meter rollout, customers “know what their bill is today,” Reguly said. Customers can get alerts when their usage is trending toward a pre-determined set point, he said.

SDG&E rolled out a peak-time usage rebate program last year for its 1 million residential customers that reduced charges by 75 cents per kilowatt hour between 11 a.m. and 6 p.m. and trimmed an additional 50 cents per kilowatt hour from the bill for consumers who installed enabling technology for the utility to control the home’s energy use, he said. The goal of the rebates was to “incent the market” and to bring customers to a point of “set it and forget it” energy use, he said. Since implementing the program, SDG&E has doubled the amount of response it receives from enabled homes, Reguly said.

According to Parks research conducted in Q4 2012, polling 2,500 broadband households, the most appealing home management feature was an alert to a smoke or fire condition inside the home (50 percent), followed by an alert to a carbon monoxide/gas leak (47 percent). The next four conditions consumers wanted alerts for were water leaks (44 percent), medical emergencies (43 percent), opened doors or windows (42 percent) and motion sensors triggers (40 percent).

Security and energy management were less appealing to survey respondents, with 39 percent wanting to be able to control doors inside or outside the home (39 percent), 37 percent to monitor electricity usage and 35 percent for locking and unlocking doors and to have appliances automatically adjust settings to minimize electricity use (35 percent each). One in three respondents wanted to monitor, program and adjust a thermostat through a home management system or to turn off or check the status of kitchen appliances, Parks said.