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Engaging seniors: Are utilities doing it (right)?

Utilities invest in smart grid technology to improve overall efficiency and enable innovation. When effectively deployed, new technologies can also improve customer engagement. But, if a technology is not rolled-out effectively, it can create barriers to engagement.

Home area networks and home automation systems facilitate demand response with devices that communicate with the smart grid to receive and present energy use and costs. They also allow customers to reduce or shift their use and communicate those decisions to the utilities. The technology is an enabler. However, effective demand response depends on customer engagement. Yet some market segments, such as seniors, could be hesitant to adopt new technology[1].

Utilities have important messages to communicate to seniors that will smooth the path for receptivity to new technologies that have specific benefits to seniors as well as general benefits to utilities. Non-energy benefits could be used as the gateway to bring higher numbers of this key market segment into the fold and improve customer engagement.

A growing segment
With longevity increasing, the share of the population age 65 and older is on the rise. At the same time, lower reproduction rates are reducing growth at the bottom of the population pyramid, which means fewer workers will enter the workforce in the coming decades.

The old-age-dependency ratio[2] in the United States[3] is expected to more than double—from 22% in 2012 to 54% in 2080. The equivalent ratio in the European Union is projected to follow a similar trend growing from 28% in 2013 to 51% by 2080.

Unique needs
This growing segment has unique needs and presents unique opportunities. Housing options for seniors include aging in place, independent living, assisted living, and nursing homes. Each of these options implies a different level of care, with nursing homes normally providing the highest level of care outside of a hospital.

A recent study conducted by AARP[4] found that approximately 90% of seniors aged 60 and older in the United States intend to continue living in their current homes for the next five to ten years. Although 65% of seniors between the ages of 60 and 70 find it very easy to live independently, only 43% of those aged 70 or more find it very easy.

One-third of survey respondents feel financially unprepared for the costs of long-term care, and approximately 15% of seniors surveyed say they are not confident their finances will last through

their retirement years.  With increases in costs for nursing home care and assisted living outpacing inflation, this is a market segment that has a clear need for affordable solutions. This is a prime segment for home automation systems.

Healthcare in the home?
Home automation systems (HAS) that provide integrated solutions for home security, energy management, and entertainment are beginning to include features related to remote care or telehealth. Smart Grid technology can be used to provide useful information on daily activities, and can also be used to monitor both the short- and long-term health of elderly individuals. HAS with telehealth features—such as fall detectors, personal alarms/lifelines, mobile tracking (for dementia sufferers, for example), and monitoring of vital signs—represent an affordable option that will allow seniors to age in place longer, while offering essential peace of mind to them and their caregivers.

DNV GL recently conducted proprietary research in the US, Germany, Ireland, Italy, the Netherlands, Spain, and the UK to investigate awareness of, interest in, and features desired in HAS. Almost 20% of respondents indicated that telehealth was a must-have feature in a HAS. This ranged from 10% in the Netherlands to 34% in Italy. While these numbers represent the level of interest amongst the general population, interest amongst seniors (and potentially their caregivers) is much higher.

Table 1: DNV GL survey shows seniors are interested in teleheath features in home automation systems

Table 1: DNV GL survey shows seniors are interested in teleheath features in home automation systems

 

A recent Smart Grid Consumer Collaborative (SGCC) report [7] noted that “seniors express interest in a number of programs and technologies, some more driven by Smart Grid than others.” The programs of interest to this group were those that offered significant savings potential. While 20% of seniors indicated that they view their utility as a trusted source for energy-saving products and advice, an equal number indicated they do not know whom to consult as a trusted source.

Telehealth as a gateway benefit
The confluence of these findings represents an opportunity for utilities to play the role of trusted information provider and to communicate the potential non-energy benefits that the Smart Grid enables via HAS for this important market segment. Identifying telehealth as a gateway benefit and tailoring messaging around this core theme will resonate with this audience and will improve customer engagement.

DNV GL can help you gain insight into this and other key market segments using targeted primary and secondary research and advanced analytics. For more information about the above results and DNV GL’s custom research services contact:

United States
Gomathi Sadhasivan
Gomathi.sadhasivan@dnvgl.com

Europe
Kathleen Gaffney
Kathleen.gaffney@dnvgl.com


[1] http://www.pewinternet.org/2012/11/30/part-ii-barriers-to-adoption/

[2] The impact of this demographic shift may be captured by the “old age dependency ratio,” which is defined as the ratio of dependents older than 64 to the working-age population (aged 15 to 64).

[3] http://www.census.gov/prod/1/pop/p25-952.pdf , http://www.census.gov/prod/2014pubs/p25-1140.pdf

[4] http://www.aarp.org/content/dam/aarp/livable-communities/learn/research/the-united-states-of-aging-survey-2012-aarp.pdf

[5] Based on proprietary DNV GL surveys conducted in 2014 amongst 5,278 respondents representative of the online general population in the US and Europe

[6] Statistics for the US are for percent of the population aged 65 and older

[7] Based on research published by the Smart Grid Consumer Collaborative in 2014

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