Since launching ILLUME, we were graciously invited to participate in two industry events: the E Source Forum and the ACEEE Energy Efficiency as a Resource Conference. While both conferences offered a wealth of insight, I returned home after a week away with one key insight: the future of the energy efficiency industry lies in our ability to deliver services, not products. What do I mean by that?
As an industry, when we think about energy efficiency as a resource and the programs that deliver this resource, we overwhelmingly focus on energy efficiency products. We obsess over the objects and widgets we want customers to install in their homes and businesses. Our imaginations go wild focusing on new technologies, new interfaces, two-way communicating devices, solid-state lighting. While these physical measures are essential to delivering persistent energy savings, they do not and will not deliver customer engagement. Services will.
Consumers view energy as a service, not a product. Customers pay their energy bill not to purchase kilowatt-hours, but rather to pay for the lifestyle that services offers. Few customers are interested in saving energy. Most are willing to pay to improve their quality of life.
If you truly accept and consider energy as a service and not a product, then we must fundamentally shift the way we think about energy conservation and how we deliver it. Rather than asking our customers to “save energy by purchasing or buying [insert item here],” we must ask instead, “what can we do to make your life better?”
When we shift our thinking to a service model, the way we engage customers and deliver products changes. Consider the following examples:
Home Energy Audits:
- Product Model: Provides a report on actions the customer can take to generate energy savings.
- Services Model: Provides an energy coach, advocate or concierge that works with homeowners to make continual and gradual changes within their budget and lifestyle considerations. Learn more about an approached designed by my partner Sara here.
Energy Feedback Programs:
- Product Model: Provides charts that show interval energy use over time, compares you to others.
- Services Model: Actively tells customers when their energy use peaks. A service that suggests actions to reduce energy or alert customers to likely household culprits. No charts needed.
- Product Model: Customers opt-in to an event and are subjected to a standardized curtailment strategy.
- Service Model: Customers opt-in to energy management services and set homeowner-defined temperature thresholds for thermostat management, such as standard settings on work days, weekends, peak days, and during critical peaks. More, it takes the need to do, respond or act away, its automated and makes life easier for the customer.
Now, more than ever, we have the opportunity to deliver service-based models with the deployment of smart meters. The utility and/or vendor that can harness this data and deliver a comprehensive energy services platform for customers will not only deliver energy savings, but will also identify new utility revenue streams. The key to success, however, is changing the way we think.