This special interest group is where customer care professionals share tactics on how utilities are improving interactions with their customers. 


Consumers, Incentives, and Energy Efficiency Behaviors

image credit: Studioclover - Dreamstime
Elizabeth Parks's picture
President Parks Associates

I joined Parks Associates on a full-time basis in 1998 after graduating from the University of Texas at Austin with a BA in psychology. Connectivity is changing the way people live and interact....

  • Member since 2019
  • 2 items added with 2,785 views
  • Jul 26, 2019

The growth of the smart home, distributed energy, and electric vehicle markets creates challenges for utilities, but also opens many opportunities for new partnerships, business models, and strategies to increase consumer engagement through connected products and services.

Parks Associates data reveals 56% of consumers in broadband households find it very important to have an energy efficient home and another quarter (26%) rate it as important. Yet, consumer behaviors often do not match their values and good intentions — only 9% of consumers think their home is energy efficient. While 91% of consumers in broadband households report taking mindful actions to reduce their energy consumption, such as turning off lights and running the dishwasher only when full, far fewer have made more drastic—and expensive—measures to truly impact their home’s efficiency. Just 8% report installing new windows, for instance, and 3% report using rooftop solar panels.

The gap between importance and actualization is an opportunity. As energy efficiency programs expand beyond HVAC and building envelope improvements, it is critical to understand the consumer decision process. Incentives are most cost effective when they influence behavior. Providing incentives to those that already planned to purchase high efficiency products, free riders, is unnecessary. Targeting buyers that are likely to purchase a less efficient product provides a much better return.

Energy efficiency features do drive product purchases. After price, consumers rank equipment efficiency the top purchase consideration for four key products: water heater, HVAC, smart thermostats, and pool pumps. Incentives including discounts and rebates, financing options, and solutions that provide access to real-time energy usage data can have a significant impact on consumer purchases.

  • 31% of smart lighting system owners and 30% of smart light bulb owners agree that a rebate or discount “prompted a purchase sooner than planned,” and 30% of owners of both devices agree that the offers “prompted a purchase which would not have been made otherwise.”
  • Approximately 50% of HVAC equipment buyers changed their minds to upgrade the choice after financing or rebates were offered.
  • Instant rebates are the preferred incentive for water heaters.
  • Access to real-time energy consumption data is valuable to consumers. Nearly 30% of those that believe an energy efficient home is important find real-time energy usage data the most appealing of the energy monitoring services tested. 
  •  64% of consumers ranked real-time energy consumption among their top three desired energy management features. Consumers want to understand which products consume the most power and which continue to consumer power even when off.
  • Financing is a more effective energy efficiency incentive than rebates.
  • Rebates are effective for less expensive products like smart thermostats, although financing is equally effective for those products.

Utilities are undergoing a variety of digital transformation efforts to more effectively engage with consumers in order to increase customer satisfaction, enhance acquisition, improve retention, and cultivate new revenue streams. Significant opportunity exists to increase customer engagement through marketplaces, capture a larger share of revenue, drive adoption of smart and energy efficient devices that pave the way for other energy services, and form new partnerships with smart home vendors.

Matt Chester's picture
Matt Chester on Jul 26, 2019

Utilities are undergoing a variety of digital transformation efforts to more effectively engage with consumers in order to increase customer satisfaction, enhance acquisition, improve retention, and cultivate new revenue streams.

What aspects of today's utilities would you say are creating this need to focus on customer satisfaction more than ever? Obviously utilities have always wanted happy customers, but it seems to be an even more emphasized priority with the programs in which utilities have been investing in recent years

Elizabeth Parks's picture
Thank Elizabeth for the Post!
Energy Central contributors share their experience and insights for the benefit of other Members (like you). Please show them your appreciation by leaving a comment, 'liking' this post, or following this Member.
More posts from this member

Get Published - Build a Following

The Energy Central Power Industry Network is based on one core idea - power industry professionals helping each other and advancing the industry by sharing and learning from each other.

If you have an experience or insight to share or have learned something from a conference or seminar, your peers and colleagues on Energy Central want to hear about it. It's also easy to share a link to an article you've liked or an industry resource that you think would be helpful.

                 Learn more about posting on Energy Central »