- Residential DER
- DER Trends
- Customer Relations
- Rooftop Solar
Bringing Energy Retailer Consumers to a Decentralized Energy Future
In May, I participated in a webinar with Will Ephraim from Eliq to talk about consumer adoption of residential distributed energy resources (DER). In it, I presented several models that companies are using to attract and retain customers using DER and highlighted why using DER changes the relationship between the customer and their energy retailer.
DER can transform a commoditized and short-term relationship between customer and retailer into a long-term partnership that is mutually beneficial. Despite this, there are not many successful cases of DER-enabled products from traditional or challenger energy retailers in the market. This comes even though most of the webinar’s audience (which included a significant number of energy retailers) think that the energy retailer’s role in 5 years will be of an energy as a service company or being part of a connected ecosystem.
Energy Retailers Are Interested in DER
The fact that energy retailers have not been successful with DER-enabled solutions does not mean residential energy consumers are not interested in DER. For example, Europe has around 5-6 million residential customers with solar roofs and, in 2020, Guidehouse Insights expects about 1 million customers to switch to a solar roof. According to the Guidehouse Insights report, Global DER Deployment Database 1Q20, 23 million European households are expected to have solar roofs (and around 24 million are anticipated to be charging their EVs at home). This amount is the equivalent of all the households in the UK, Italy, or France switching to DER-enabled energy solutions.
Some companies are navigating this transition well. The most successful cases to date come from DER-first companies like sonnen in Europe and Australia or Sunrun in the US. Both of these companies have been successful following a customer first approach. Sunrun innovated the solar as a service model (residential solar leases and power purchasing agreements) and introduced its battery-based virtual power plant (VPP). sonnen has had success with solutions like its sonnenCommunity, sonnenFlat, and (more recently) sonnenNow and sonnenDrive.
Insights from the Residential DER Webinar
Ephraim highlighted the following three insights, which jumped out from the Q&A discussion from the webinar:
- Start with the customer need and not the technology or solution to be successful now and in the future. This element is often overlooked in energy.
- The importance of the role of EVs in engaging with customers. For example, in Norway, it is an economic incentive to buy an EV. From customers on its platform across Europe, Eliq has seen that having an EV likely doubles the level of engagement.
- The market is changing, and the energy transition is picking up pace. Energy retailers need to be thinking longer term to ensure success.
From my side, the most successful strategies that have become relevant in DER include the following:
- Personalize and micro-target customers; don’t take the one-size-fits-all approach.
- Be there when consumers are making expensive decisions, like buying a car, a house, or changing heating and cooling systems. Partner with automakers or car dealerships and home builders. Follow the traditional DER distribution channels working along local solar and HVAC installers.
- Help customers with their pain points, such as moving house, adding solar PV, buying an EV, and needing support for home charging.
- Engage customers with rates or plans that enhance the value of their DER. Add value that is not readily available to the consumer, like VPP participation.
- Have a marketplace and curate new technologies, like battery storage and smart devices (thermostats, plugs, lights, etc.); become a trusted source of products and information.
Guidehouse Insights provides in-depth coverage of these topics. For more information, check out our ecosystem insights research services.