Monday, December 8, 2014

Engaging consumers: there is an app for that

By Patty Durand, SGCC Executive Director

The question about how to influence and motivate consumers takes on new meaning in the age of Smart Grid. We know that utility programs to reduce peak load and overall electricity use would greatly benefit by broader customer participation. So one fundamental question is: What motivates consumers to change their energy use behaviors to match the grid’s needs while benefiting all stakeholders? 

One concept is to make the engagement process fun, meaningful and informative. Thus the purpose of our recent SGCC Thought Leadership webinar, “Cool Things the Smart Grid Enables.” And that’s also the aim of U.S. Department of Energy’s app contest, “American Energy Data Challenge” – which is to make electricity use data meaningful to consumers so it inspires new behaviors and new engagement. In fact, two of our four webinar panelists have won recent U.S. DOE recognition for their work.

Here is a snapshot of the four innovations featured on our webinar:

Cole Herschkowitz, founder and CEO of Chai Energy, developed an app that uses smart meter data to show the homeowner how much money he/she spends on electrical appliances per month and how much each costs to run per hour. It provides energy efficiency tips to help the homeowner reduce costs on energy-intensive uses and sends alerts if an appliance has been left on. This is another permutation of information feedback, which is an established, effective tool for behavioral change. The app runs on a smartphone and is available 24/7 on a near-ubiquitous device. Chai currently is in pilot projects.

Ron Dembo, founder and CEO of
Zerofootprint, has garnered a U.S. DOE “Apps for Energy” award. Dembo sought a means to reward participants for changing behavior in a way that affects their entire lifestyle. Zerofootprint’s VELObill platform tracks a homeowner’s energy use in real time in the context of one’s own neighbors, community and/or peer groups. It rewards the creation of nega-watts with “Good coins,” which are designed to avoid the phenomenon of saving energy in one place only to overuse it elsewhere. Good coins can be used to lower one’s own bill or be donated to charity, with subsequent uses that promote the common good. Dembo wisely noted that there’s no single solution for consumer behavior change, nor will his app work on every consumer segment.

Holland Wood, founder and CEO of Ikehu, Inc., is another “Apps for Energy” winner. Wood observed that current flat rate energy pricing is divorced from energy costs and their fluctuations. Not only do intermittent renewable energy sources drive some price fluctuations but they also add grid integration and control costs. He created a DRIVE platform (Demand Response IncentiVE) that allows a utility to reward a customer in a real-time incentive program. When a utility needs customers to curtail or increase use in a given period, it sends an offer to the customer’s smartphone. If the customer is unable to act on the offer, the utility nonetheless provides a small reward for engagement. If the customer can act and subsequent data confirms that action, the reward is substantially higher. Ikehu’s app is in the pilot phase.

Tim Johnson is founder of EnergyMobile Studios, which is creating a series of apps including Gridwatch, Powercents and others. Gridwatch is an app for utilities and consumers that shows supply, demand, emissions, and the CO2 intensity of generation sources across the grid. Powercents – the top app in Canada – is designed for Ontario’s time-of-use rates and provides alerts about TOU increases so users can shift energy use and save money. These apps also try to broaden their appeal by becoming relevant to a consumer’s lifestyle by linking energy use with core beliefs and motivations.

One audience question for the webinar panelists provides my closing thoughts here. The question was: “What has the initial reaction among utilities been to your offering?” Panelists answered honestly – the utility’s job is to keep the lights on and it is a challenge to get them interested in these apps. They’re not as concerned with ‘cool things.’ It’s not an easy nut to crack.

Conversations with California utilities, for instance, are easier because they are under a mandate to save energy and lower peak demand. The challenge is to maintain a great user experience without their being too many requirements for an app.

Utilities are very interested in integrating a rewards system to engage and incentivize customers and they’re looking into how to make an app and its behavioral changes “sticky” – i.e., persistent, and not a one-time or pass through experience.

Also utilities express some sticker shock on the cost of applying apps and utilities have questioned who pays and how.

My own view is an optimistic one. The consumer-facing innovations we have all been discussing are being here now, being created. The early pattern suggests that start-ups and legacy institutions such as power utilities will need to partner on their continued creation and implementation. We know that utilities are involved in piloting these apps and early findings suggest that the apps indeed are engaging and useful. I would love to hear the utility side of this story on practical constraints and barriers to implementation so we can learn together, and maybe make the path towards consumer interest smoother and swifter.