• Utility Customer Engagement
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  • Demand Side Management
  • Residential Energy Innovations

Noninvasive Solutions Are Key to Engaging Residential Customers

Oct 06, 2020

Guidehouse Insights

Prior to the coronavirus outbreak, the power industry understood that customers spent approximately 8-11 minutes per year thinking about their utility bills. I venture to say that this amount of time is growing as more individuals stay at home and receive higher utility bills than they did at this time in 2019. Utilities today are in a unique position—they have (slightly) more customer time and attention. While call centers receive a higher volume of inquiries as to how customers can reduce monthly payments, there may be no better time to market noninvasive demand side management (DSM) solutions.

In a recent white paper, Guidehouse Insights explored the value that control of electric resistance water heater fleets can bring to utilities. Water heaters are already prevalent in most single-family homes and in many multifamily units. The key to engaging such resources is demonstrating to customers that their participation in DSM programs will earn them rewards, will not cause discomfort, or better yet, may go unnoticed entirely. Engaging customer-sited resources such as water heaters in a noninvasive manner consists of three fundamental principles: easy installation, automated control, and continued customer comfort.

Ease of Installation

Utility customers are most likely to adopt DIY solutions or those that require minimal engagement with outside contractors. Residential programs that embrace a bring your own device model may find success in engaging customers who have already implemented smart home technologies such as thermostats or batteries.

Where the professional installation of a new device—such as a water heater control device or Level 2 EV charger—is necessary, utilities could equip their customers with a list of recommended area contractors. In some cases, if the device is offered through a utility direct-install DSM program, utility-provided scheduling and installation services can help reduce barriers to customers joining the program.

Automated Control

There continues to be a time and a place for behavioral programs like demand response (DR) and energy efficiency efforts that alert customers to adjust the setpoints on their thermostats or delay electric-intensive home appliance use until after peak periods. However, with customer load patterns adjusting due to more time spent home, many customers will appreciate utilities taking steps to adjust their energy consumption for them. Automated programs that take advantage of smart technologies' communication abilities will help customers reduce their utility bills without interrupting work calls or daily chores to adjust their home energy consumption.

Comfort Becomes Key

Automated programs might reduce barriers to participation and see the greatest level of engagement. While customers should have the choice to opt out of specific events, if events maintain customer comfort, such actions may be unnecessary.

In situations where customers may notice a change in HVAC setpoints, precooling or preheating may mitigate the effects of uncomfortable temperatures. Water heater programs may avoid all discomfort, as hot water rises to the top of the water heater where water draws from. A given tank’s ability to hold temperature while minimizing the mixture between the hot and cooler water will provide customers with consistent temperatures while earning them incentives for participation. Finally, battery DR programs tend to avoid concerns of customer fatigue, as they have no direct effect on home comfort. Utilities should take advantage of increased customer attention to market residential DSM solutions that meet three main criteria: the necessary hardware is easy to install, the utility handles automated control, and customer comfort remains a paramount concern.