By Hope Lobkowicz
Utilities around the country are pushing full-steam ahead to expand their portfolios by acquiring more clean energy resources. Regardless of whether these decisions are being driven by regulatory targets, corporate sustainability goals, or customer demand for green power, decarbonization is a central theme of the changing utility landscape.
As part of the planning process for expanding renewable resources and programs, utilities should first understand customer demand and preferences for renewable energy, including price sensitivity. Next, developing a strategy for engaging customers in products and programs is critical to meeting utility renewable energy goals.
This step is particularly important now, when residential and business customers have more choices than ever to go green. The price of rooftop PV is coming down (sometimes aided by utility incentives), and many third-party solar installers offer competitive pricing for solar power-purchase agreements. These advancements in the marketplace can mean lost market share for utilities, but the overall trend toward distributed generation and customer demand for clean energy also offers opportunity. For instance, utilities may provide green pricing programs that allow their customers to pay a few dollars more each month for the peace of mind that their power is coming from a clean source, or strategically install local renewable energy and storage to reduce capacity constraints on specific substations.
Though each utility faces unique regulatory requirements and individual goals surrounding clean energy, they all share a common challenge: to be successful at reaching those goals, utilities must understand the market and know how to engage their customers.
Gaining knowledge about customer perceptions, needs, and plans for purchasing renewable energy will aid program planning and marketing strategies. Here are several questions utilities should consider in expanding renewable energy programs—whether it’s through community solar or other installed capacity, financing, incentives, or voluntary green pricing programs:
1. Market outlook
What is the forecast for market adoption of a given renewable energy or distributed energy resource?
2. Customer preferences when designing a new offering or tweaking an old one
How aware are customers of existing utility renewable energy programs, and how can utilities increase uptake? What are customers willing to pay, and what are the most important features of a program from a customer perspective?
3. The right incentive level or message
If offering an incentive for onsite renewable energy generation, or storage, what is the optimal incentive level to maximize participation and what is the right marketing message to engage customers?
4. Impact on utility’s brand
How can renewable energy programs help boost brand perception, customer engagement, and customer satisfaction?
The answers to these questions will help utilities optimize programs and ensure renewable energy and distributed energy offerings meet customer needs. Cadmus recently supported one of our Midwest utility clients in developing its renewable energy roadmap using customized customer research that provided the client with specific and detailed customer preferences regarding program options and estimated market uptake. To see some of the customer insights gained from that research, click the button below.