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An EE and DR Forecast for 2017

Published January 12, 2017

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As much as we’d like to have one, there is no magical way for us to foresee what the future of our industry holds. Instead, we have a team of policy, technology, customer engagement and business experts here at CLEAResult. If you can’t have a crystal ball, they’re the next best thing! We asked them for their predictions related to energy efficiency and where it’s headed in 2017. This is what they came back with:

1. Customer-Centricity Will Take Center Stage

Perhaps the strongest voice a utility can have on its side is that of its customers. In order to harness and amplify the power of this voice, utilities need to take a customer-first approach to the programs they develop and the communications they deliver. At the same time, utility customers are tech-savvier than ever. A seamless experience across all digitals channels isn’t just “nice to have”—it’s an absolute must.

2. Smart Demand Response Programs for Smart Homes

Learning thermostats and smart home platforms are two categories of products we expect to continue penetrating the homes of average consumers in the new year. Thermostats from Nest, Honeywell, and Ecobee can all be easily integrated into platforms like Amazon Echo, Google Home, Samsung SmartThings and Apple HomeKit, providing users with real-time feedback that makes it easy to understand and lower energy consumption. In 2017, demand response (DR) programs will look to ascertain the ways in which bring-your-own-thermostat programs can be utilized in such a way as to achieve cost-effective advantages both for the utility and the consumer.

3. Simple and Intuitive Advanced Lighting Controls Come of Age

2017 will be a critical year for advanced lighting control systems. Incremental costs for adding integrated advanced control capabilities that incorporate monitoring and reporting are now down below $50 per fixture and will continue to drop. There will be a point in 2017 at which not incorporating these controls into lighting upgrade will become irrational.

4. Electric Vehicles Move into the Fast Lane

Elon Musk’s electric car company Tesla has received nearly 400,000 preorders for its new Model 3 sedan. This is a pretty clear indicator that the electric vehicle (EV) market is showing no signs of slowing down.

In 2017, time of use (TOU) rate scheduling will gain further traction among utilities. TOU schedules allow utilities to separately meter charging stations, creating price signals that encouraging charging at times when energy demand is relatively low. TOU schedules have the added benefit of providing utilities with valuable insight into EV use and charging behavior across service territories.

Also, 2017 will see Volkswagen begin to spend $2 billion on EVs and EV infrastructure as per the terms of their diesel scandal settlement. Volkswagen will also start to spend an additional $2.7 billion to offset emissions, and some of those funds could be used to create EVs and related infrastructure, as well.

5. We’ll See Performance Incentives for Modern Utilities

While focusing on customers and enabling them to use less energy leads to higher rates of customer satisfaction, such measures can also cause utilities to lose revenue along with the ability to earn income on capital investments. To alleviate this, performance incentives that can satisfy all stakeholders—consumers, utilities and policymakers—will be brought to the fore. Michigan and Illinois have both passed major legislation related to performance incentives. Illinois’ legislation will double energy efficiency goals and allow utilities to earn a return on equity on energy efficiency. In Michigan, if energy efficiency increases above 1.5 percent of retail sales, utilities could earn 30 percent of the benefits caused by energy efficiency. These bills will be implemented in 2017 as other states consider similar proposals.

6. Now Is the Time for LEDs to Shine

Compact fluorescent light (CFL) bulbs have long been a staple in residential lighting programs. They were a cost-effective alternative to the banned 100-watt incandescent bulbs. But now, the cost of light-emitting diode (LED) bulbs is dropping dramatically, and GE and Feit are completely phasing out CFLs. Consumers will be seeing more and more LEDs on retail shelves. Additionally, new Energy Star 2.0 requirements emphasize the use of LEDs to strike the right balance between cost and performance.

7. Canada Will Tap Its Energy Conservation Potential

There is significant untapped energy conservation potential in Canada, especially in areas such as Alberta. Organizations like the Canadian Energy Efficiency Alliance (CEEA) will continue to work in the coming year to establish effective public policy in an effort to drive efficiency improvements. For example, the CEEA has established a national action plan for energy efficient buildings, which recommends deep energy retrofits and calls for new construction of public and private buildings to be nearly net-zero.

8. Data Centers Will Continue to Consume Lots of Energy

As the need for processing power grows, so, too, does the demand for data centers. As convenient as they make our lives, these facilities are notorious for consuming huge amounts of energy. According to the Department of Energy, data centers in the U.S. consumed about 70 billion kilowatt-hours of electricity in 2014, the equivalent to the amount consumed by about 6.4 million average American homes. As the demand for capacity grows, energy efficiency will continue to be the prime method to help manage energy consumption without compromising data center availability, performance, storage or network security.

9. The Cannabis Industry Goes Green

In 2016, eight states approved new cannabis measures, including California, Massachusetts, North Dakota and Florida. Indoor grow operations for cannabis are nearly as energy-intensive as data centers, so as more and more states move forward on the measures approved for cannabis use, there may be more concerted efforts to target efficiency programs for the marijuana industry.

10. Grid Modernization Catches On

2017 will find many states in the midst of grid modernization proceedings. As distributed energy resources (DERs) including solar, storage, EVs, DR and energy efficiency increase, the nation’s energy infrastructure will need to upgrade in order to integrate the new technologies. Focusing on grid modernization has the potential to make the delivery of energy cheaper, cleaner, more reliable, and safer. Look for Commissions and utilities around the country to talk throughout the year—and years to come—about grid modernization to speed up the shift to a clear, more customer-centric and resilient grid.

CLEAResult’s 2016 At-A-Glance

Many of the predictions listed here build on the trends we saw and accomplishments we achieved in 2016. The e-Score™ digital engagement platform we expanded is a great example of our commitment to the customer and contractor experience. Our acquisition of the industrial utility services business unit of EnerNOC has given us extraordinary insight into the commercial and industrial energy landscape and bolstered our capabilities in this market. And the seeds of some of these items can be found in our Guide to Smart Thermostats, our “Lower Spending, Higher Returns” policy white paper and in the EV programs we’re implementing now.

For more information and resources, please check out our Media Kit.

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