How New Residential Utility Customer Solutions Will Create Revenue Opportunities

The fundamental transformation from centralized generation toward a mix of distributed energy resources (DER) and smart grid solutions known as the Energy Cloud is affecting traditional utility models for residential customers. As highlighted in a recent blog, Southern Company’s Smart Neighborhoods initiatives demonstrate how residential customer DER solutions can also benefit a regulated utility. These types of residential DER initiatives were featured in my recent Strategy Insight report, Maximizing the Residential Energy Customer Experience with Emerging Solutions.

Disruption Changes Customer Solution Framework

In the residential segment, technology and business model disruptors looking for new market entry points are bringing smart home/home energy technology and big data analytics to these utility customers. These trends will revolutionize the way people interact with their homes while also extending the role a home can play in the Energy Cloud transformation. This transformation has created a new framework for residential utility customer solutions as summarized below:

• DER Integration Solutions: The deployment of residential DER such as solar PV, energy storage, microturbines, fuel cells, bidirectional EV charging (vehicle-to-grid), and other grid-interactive load control technologies for improved resilience and demand response across smart home/home energy platforms.
• Community Energy Supply: The procurement of electricity generated from offsite DER like solar PV by residential customers under subscription agreements across a software-enabled bill crediting platform.
• Smart Home/Home Energy: An ecosystem of communicating hardware and software platforms that couple increased comfort, awareness, convenience, safety, and security with energy use and energy cost savings technology.
• Mobility: Business models such as carsharing, ride-hailing, bikesharing, public transportation optimization, smart parking, and peer-to-peer rental services delivered in urban settings to improve convenience and reduce environmental impact.
• Lifestyle and Care: Deployment of non-energy, service-based solutions related to entertainment, healthcare, security, and residential dwelling HVAC, electrical service, and appliance-related repair and warranty services.

What Does a Changing Solutions Framework Mean?

This solutions framework will help regulated utilities better understand their customer’s needs and identify new offerings and partnership opportunities to meet customer expectations for solutions beyond traditional energy sales. In deregulated markets, this solutions framework will help energy suppliers and disruptors better understand transaction and business models for bundling energy and non-energy services with energy supply. Guidehouse Insights believes that companies looking at residential customer solutions need to gain a deeper understanding of how these solutions can reduce their customer acquisition costs, improve their customer satisfaction and retention, drive longer customer contracts, and improve margins.