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2015 Predictions: The Year of Energy

By Marie Bahl McKenna
Dec. 10, 2014

Mark my words: 2015 will be all about energy.

Of course, energy has always been here, keeping the lights on, keeping us warm, keeping us alive. But the industry has been largely stuck (not entirely of its own fault) for nearly 100 years. In 2015, it all will change.

Next year, energy will come to the foreground as the leader in innovation, showing the world how one-to-one marketing can revolutionize product delivery and customer service. Other industries will look to energy as the model for how to market.

The transformation we’ll see in 2015 is not without precedent. We’ve seen some progress in 2014: forward motion that set the energy industry on its path to change. But in 2015, it will blaze its trail to the front, writing a new chapter in utilities’ history, one of customer personalization that increases profits, expands energy efficiency and sets a new standard to which other industries will aspire.

Let’s look ahead to some things we’ll see in the next 12 months:

1. Personalization that optimizes big data. Here’s where energy earns the spotlight. Increasingly more consumers desire meaningful, personal connections with one another and with their technology. Data analytics gives energy providers (and all other service providers) the means by which to cater to today’s customers. Energy will set the example by taking into account customer preferences for nearly everything: home temperature, appliance settings, access to their energy consumption data and bills.

Home data factors in, as well, including where customers live, the types of structures they inhabit, those structures’ insulation and the weather in the region at any given time. Using all of these markers, energy providers will be able to deliver customized products and services to their customers. This shift in marketing will all happen automatically through enhanced energy management technology.

The technology aggregates, analyzes and delivers useful data to energy providers so they can design programs that use customer preferences to improve energy efficiency and cut costs. These programs make energy management something that’s simultaneously effortless and fully within customers’ control.

2. A new way to market for utilities. This new era of personalization, in which customers expect enhanced services from their core providers and data analytics makes it possible to deliver these services, demands dramatic change from utilities.

Until recently, utilities have served as pure-play energy companies that offered electrons over a network of wires. It has worked, but times are changing. Customer expectations coupled with competition from companies such as Google with personalized, varied offerings are forcing utilities to provide the same.

To grow and succeed, utilities must start acting like energy service providers (ESPs). As ESPs, they will create a marketplace of energy-related goods and services that build new revenue streams and keep customers satisfied. Satisfied customers will stay utility customers instead of taking their energy needs to other independent providers.

In 2014, some utilities began to experiment with adopting the ESP model. NRG Energy unveiled a retail solar strategy and partnered with Green Charge Networks to deploy electric vehicle charging stations. Likewise, Arizona Public Service proposed a solar utility business model.

In 2015, we will see more utilities moving toward the personalized marketplace approach. It’s best for them and their customers.

3. Revolutionized regulatory boundaries. In April 2014, the New York State Public Service Commission launched its Reforming the Energy Vision (REV) initiative. Its magnitude is staggering, and its influence will come full circle in 2015. The REV aims to lead regulatory changes that improve energy efficiency and open wide the door to renewable resources.

Wind and solar will find their places, as will the wider deployment of distributed resources like microgrids, on-site power supplies and storage. It doesn’t stop there. Promotion of advanced energy management tools and demand response technologies is also key, as is empowering customers to control their electricity consumption. New York has started a powerful trend.

Already in 2014, we saw other states — California, Hawaii, Massachusetts, Minnesota — start to revamp their regulatory practices, and their actions should prove contagious. As GTM research says, these states are “laying the groundwork for revolution” and the shift to a more viable and robust energy market.

4. Solar as an opportunity for utilities. In 2015, utilities will shift their perspective on solar and other alternative sources of energy, and it won’t happen just because of new regulations. They’ll have to offer these resources; if they don’t, they will lose customers to independent renewables providers.

A study published in the Journal of Economic Geography notes the power a phenomenon called “peer effects” already is having, particularly with solar. It’s simple: Someone notices the neighbor’s solar panels and decides to invest, as well, followed by another neighbor and another, and then most of the neighborhood has gone solar. The question utilities must consider is who’s providing the power?

Successful utilities will realize soon that renewables are not threats; rather, they are critical components of comprehensive and personalized energy programs.

A Year of Change

As the New Year approaches, the energy industry has lots to anticipate. It’s an exciting time with much potential for change and growth. The technology and resources exist to make this change possible. Now it’s a matter of utilities and energy providers’ adopting the infrastructures and partnering with the right companies to deliver the services customers want.

Come December 2015, there’s no reason we can’t be writing year-end wrap-ups replete with developments that have repositioned energy as the industry to watch. Jan. 1 is right around the corner. Let the innovation begin.
Original article at: http://www.elp.com/Electric-Light-Power-Newsletter/articles/2014/12/2015-predictions-the-year-of-energy.html

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