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Technology is Shaping Energy Efficiency Through Connectivity

Published June 20, 2017

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Technology gives utility customers easier, more accessible ways to save on energy, involving them more actively in energy efficiency. In turn, this new tech gives utilities access to big data that helps drive decisions, especially those that contribute to increased customer satisfaction. In our recent report, Innovation Outlook: The 2017 State of Energy Efficiency, we focus on energy efficiency technology and how it’s affecting many facets of the industry.

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Energy efficiency approaches are thriving as we continue moving into the Internet of Things (IoT). Smart appliances (e.g., smart fridges), home automation (e.g., smart thermostats) and smart lighting (e.g., smart LED bulbs) are three categories at the core of this change.

The hyper-connected world of IoT not only allows consumers to become aware of, and more involved in, their energy use, it also gives important usage data to utilities. Utilities can apply that data to improve energy efficiency on a much broader scale: This ultimately makes them more responsive to energy demands and spikes and enables true system wide energy-use optimization.

Advancements in technology and connectivity have enabled easier to deliver, more user-friendly experiences for consumers as well as made them more conscious of their own energy usage. Likewise, utilities can offer incentives to customers that allow the customer to save money without making the incentives onerous on businesses. This helps the utilities in two ways: They save more money and generate higher customer satisfaction.

The evolution of demand response
Technology has also helped shape demand response (DR). As we already know, DR and energy efficiency programs go hand in hand. DR allows utilities to reduce energy usage and balance supply and demand. Utilities encourage consumers to take part in DR by offering tiered pricing and rebates. As noted in an article from energy.gov, methods include offering time-based rates such as time-of-use pricing, critical peak pricing, variable peak pricing, real time pricing and critical peak rebates. Air conditioner and water heater cycling programs are also common for DR, allowing for costs to be kept down all while keeping service reliable.

Offering customer incentives for DR creates a win-win scenario for utilities. You can control load-shedding as needed and, in turn, your customers receive a reduced bill creating higher customer satisfaction.

As Gerardo Galdamez of Entergy Arkansas said at our last Energy Forum conference, “In demand response, the trend is to go for both load-shedding and customer satisfaction. With proper incentives, customers are happy with DR and accept the need to monitor, say, inside temperature. We install smart thermostats, which give us access to data from the installation and feedback on performance. With a smart thermostat, we have occupancy information that we can process and decide whether to turn DR on or off. So, we get customer satisfaction.”

DR is not only important for residential customers, but also for commercial and industrial use. Thanks to technology and the expansion of automated production, commercial and utility customers have become more engaged with the ways they use energy and, because of the potential savings and ease of involvement, are eager to participate in DR.

Widespread technology adoption will continue reshaping energy efficiency in the coming decades. In our recent report, David Rowan of WIRED UK magazine cited a 2007 television appearance by then-Microsoft CEO Steve Ballmer that tells a cautionary tale of technology being ignored. Ballmer said he didn’t see the $500 iPhone as a threat, and, in fact, made fun of its lack of a keyboard which, he asserted, would make typing emails difficult, rendering the phone unsuitable for business use. This, of course, was not the case. To thrive in the future, we must readily embrace technology, not fear its inevitable disruption.

To read more about how technology is shaping the industry as well as detailed and actionable findings on customer centricity, innovation and the evolving utility business model, download Innovation Outlook: The 2017 State of Energy Efficiency for free.

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