Click here for energy savings: engaging utility customers online
We have been talking about upgrading the water heater in our home from a traditional storage tank model to a tankless water heater for a while now. I live in San Francisco and am a PG&E customer. I recently logged into my utility account and PG&E’s Home Energy Checkup service informed me that in the past year water heating has been the most significant chunk of energy usage in my household. This is helpful information and it means it is time to shop for a new water heater!
Utilities are increasingly using web-based tools like Home Energy Checkup as a platform for educating and promoting customer engagement with their energy consumption. These tools gather basic information from customers about their homes and habits to provide them with an online “audit” that includes recommendations for energy saving actions, personalized for individual customers. The tools are dynamic; the more information the customer provides, the more customized the recommendations become. Customers are encouraged to set up plans to save energy, update the tool with their progress, and then gain more information about ways to save energy in a recursive loop. These Digital Age features make these tools different from simple online audits of the past that were simply used as alternative means of delivery for one-time engagement. The underlying theory is that this type of continuous customer engagement will lead to lasting behavior change with respect to energy consumption.
Participation or customer engagement may occur at a wide range of levels: from the initial sign-in with no other activity beyond viewing energy usage data to substantial engagement with goal-setting behavior and follow-up, thus leading to potentially highly variable savings. The tool leads participants through a range of processes and captures data at every step with the goal of encouraging customer engagement. Akin to home energy reports (HERs), these tools are considered behavior programs and are typically offered to customers as free services on the utility’s website.
DNV GL recently completed a state-wide evaluation in California of the online audit tool (also referred to as the Universal Audit Tool) offered by its IOUs. Our research found that the savings achieved by these services/tools are significant and in the range of 1%-3%, on average. We analyzed customer bills and discovered that savings estimates for high engagement customers (those who interacted with the tool by creating an Action Plan) can be as much as 2x to 3x the savings estimates for low engagement customers.
Across the state of California, over 2 million residential customers have engaged with these online tools provided by their IOUs. These tools are “opt-in,” where only a subset of customers will choose to log into the site and participate. DNV GL’s research sheds light on the motivators of and barriers to participation. Understanding the opt-in decision is critical for expanding the use of such programs and extrapolating participant savings to future/potential participants.
Just how much are we talking about in terms of savings? This varies by household, but let’s return to the new water heater I should be getting soon. The U.S. Department of Energy estimates gas-fired tankless heaters save an average of $108 in energy costs per year over their traditional tank counterparts, while electric tankless heaters save $44 per year. That translates to an estimated 10% savings in annual energy costs just from upgrading my water heater to an electric tankless heater or a 4% savings in annual energy costs if I upgraded to a gas tankless heater. And with energy providers now serving as retail platforms for energy efficient products, customers can seamlessly go from information to consideration and finally to purchase – all on the same website.
Contact Gomathi Sadhasivan to learn more about DNV GL’s work in the Customer Decision Sciences area. Watch this space for upcoming DNV GL research on a utility retail platform in the Northeast in Q3 2017.