Need for Utilities to meet consumer expectations with energy saving programmes

Pike Research’s just published Smart Grid Consumer Survey indicates that U.S. consumers have fairly realistic – or perhaps optimistic – expectations when it comes to saving money on their electric bills.

Nearly 6 out of 10 (59%) say they expect to save $15 or more on their electric bills based on recommendations from their utility. That translates to about 15% or greater savings, given that the average U.S. electric bill is $103.67, according to the latest government data.

However, many existing energy-saving programs offer reductions only in single-digit percentages, often as little as 1% to 3%.

The much-touted Opower solution, which dozens of U.S. utilities have adopted, provides an average 1.5% to 3.5% decrease on energy bills through a combination of paper bill reports and online recommendations.

That’s not much to an individual homeowner. But for a utility, the relatively small percentage – spread across thousands of households – can mean substantial savings in terms of reduced operational costs and help in terms of meeting efficiency targets.

Clearly, consumers have a good sense of what matters to them when it comes to savings.

If the product, service, or program a utility is offering does not deliver meaningful savings, on the order of 15% or more, consumers are unlikely to be interested.

While it’s nice to have a few percentages off monthly bills, they’re looking for double-digit reductions for the programs to be worthwhile.
So, it makes sense for utilities and vendors in home energy management (HEM) to provide something consequential, which is starting to take place.

PG&E in California, for example, is trialling a smart thermostat service, powered by Opower and Honeywell, that’s reportedly cutting heating and cooling costs by 15% to 25%.Similarly, Reliant Energy in Texas is working with Tendril to deploy in-home displays that connect to smart meters, enabling savings of up to 15%.

More utilities should consider taking the lead to reach wider traction among consumers. If not, current energy savings solutions will continue to languish.

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