Texas is one of the few markets in the U.S. where the electricity market is deregulated and where there is a competitive market — as the researchers behind the Powerscorecard put it consumers in Texas can shop for electricity “the way they shop for cars or clothes: the price matters, but so does the quality and the source of power.” That means the state will potentially be able to provide us with an early look at how consumers will react to new smart meter and smart grid services, as electricity service providers in the state will be experimenting with offering new services as a competitive edge.
This week I’ll be moderating a panel at the KEMA Executive Forum in Irving, Texas, on how smart grid products will effect consumers in the state and the nation (KEMA is an energy consulting company owned by a bunch of Dutch utilities) and I expect to learn a lot at the event. And timed with the event this week, the folks at KEMA have created an interesting report on the smart energy market in Texas, which weighs in on some interesting myths, trends, and survey data about the smart grid and consumers. Here’s 5 things you need to know from the KEMA Texas smart energy report:
1). Customer Awareness and Interest are Low: Unless it has to do with raising or lowering their energy bill, consumers aren’t paying attention and don’t care. As a recent Harris Interactive poll found, 68 percent of Americans haven’t even heard of the smart grid. KEMA finds that “Smart grid exuberance should be tempered to account for the challenge of engaging large numbers of residential customers.”
2). Very Early Days for Smart Energy: Once companies come to terms with the fundamental challenge with engaging large amounts of customers on energy, they need to realize that the market that is there, is still in a very early state. KEMA says: “Value propositions are evolving quickly, but are currently underdeveloped. Wait at least 6 to 24 months to see more movement in this space, says KEMA.
3). Most People Don’t Want to Actively Manage Energy Consumption: Despite what many startups in Silicon Valley are screamin’, the majority of consumers just don’t want to spend any time managing their home energy consumption. KEMA says: “For mainstream customers to adopt and use home energy technology, offers [products] must demonstrate value without active management.” Check out what smart thermostat software startup EcoFactor is proposing, they have been advocating this position for months.
4). If It’s Not About Saving Money, Consumers Don’t Care: The main thing that consumers care about when it comes to energy is: how can they save money? A successful consumer-facing smart grid application will have to focus on saving the customer money first and foremost, not on green aims, or consumer electronics, or competing with peers to lower energy consumption. KEMA’s take: “With limited exceptions, lower prices and bill savings will be the fundamental drivers of mainstream adoption.”
5). Texas Will Be a Proving Ground: As we mentioned above, companies and entrepreneurs that are trying to sell into the smart grid and energy services markets will be wise to closely watch the Texas market. KEMA: “Texas energy providers will find out sooner and more clearly what customers want and don’t want.”
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