Two massive new revenue opportunities where utilities have a head start (but will they blow it anyway?)

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Quick Take:  Take a look at the release below from Accenture. You'll see that more than 50% of utility customers will want solar power or connected home services in the next five years. So far, no big surprise if you've been watching the news (and watching where companies such as Google and Tesla are investing their money).

 

Here's the thing I want you to notice: When consumers were asked who they want as their providers, utilities came in second place. Now listen to this: When similar surveys were performed by others several years back, utilities were in first place by a wide margin.

 

So let's summarize. Two massive new markets are opening up. (Solar panel installations will jump 600% in 5 years!) Consumers originally preferred to get these things from utilities, but that preference is eroding due to utility inaction. Today utilities are in second place. When we revisit this in a year or two, they will probably have slipped even further.

 

Sure, I know that utilities don't have an entrepreneurial culture. And I know that to pursue these markets they'd need to negotiate with regulators. But guess what -- every new business has risks and challenges. In an era where we're talking about a utility death spiral, I think it's criminal that utilities are content to sit back and cede huge new revenue streams to others, in areas where they have natural advantages. - Jesse Berst

 

Interest in connected-home and alternative energy solutions to increase six fold, Accenture Research shows

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NEW YORK; June 23, 2014 - More than half of global energy consumers would consider installing connected-home solutions or solar panels in the next five years, or purchasing an electric vehicle in the next 10 years, according to a new survey by Accenture (NYSE: ACN).

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Interest in connected-home products and services such as energy management and other monitoring and control solutions is projected to rise from seven percent to 57 percent in the next five years, due to the expectation that they will help reduce energy bills, increase comfort and convenience, and enable remote control of home devices.

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Customer interest in solar panel installations is expected to increase six fold in the next five years, driven predominantly by a desire for energy independence, but also by the availability of subsidies and the ability to reduce environmental footprint.

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The study also found increased consumer interest in digital enablement channels and tools, but nearly two-thirds of consumers said that they experienced challenges when using these channels, and only 45 percent said that they were able to complete a given request every time.

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A significant majority (more than 80 percent) of customers said that they expect the same or better digital service from their energy providers as they do from online retailers, banks, phone and cable companies, and even government agencies.

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"Many utilities still compare their service levels to other utilities, but our research shows that they need to look to other providers’ digital experiences. Energy providers need to take the hassle out of customer interactions and make them as simple, accessible and convenient as possible. This will become even more critical as connected-home solutions gain mass appeal,” continued Guthridge.

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Of particular interest is that digital channel users appear to be more satisfied with their energy providers than non-digital channel users - 67 percent versus 58 percent.

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"The digital revolution is causing industry lines to blur and barriers to entry to all but disappear. This is creating opportunities to provide new, interconnected platforms for innovation that bring the connected-home, electric vehicles and alternative energy sources together. The battle for the home has become a cross-industry one. With traditional business models at risk, leading energy providers will need to move quickly to differentiate from new entrants,” Guthridge concluded.

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Research Methodology

Accenture’s annual global survey was based on questionnaire-led interviews with 13,720 residential consumers in 26 countries, conducted online in native languages for Accenture by Harris Interactive. It is a quantitative survey with a sample statistically representative of the general population in each country, with the exception of Argentina, Brazil, Chile, China, Indonesia, Philippines, South Africa, and Thailand, where the sample was representative of the urban populations.
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The New Energy Consumer - Architecting for the Future draws upon five consecutive years of end-consumer research, analysis of consumer and technology trends, insights from leading energy providers, cross-industry experience and Accenture’s knowledge of managing utility customer operations. The report explores new opportunities in virtual customer interaction, the connected consumer, distributed energy, and new products and services. It also offers Accenture’s view of the energy consumer of the future.

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Jesse Berst is the founder and Chief Analyst of SGN and Chairman of the Smart Cities Council, an industry coalition.

 

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