Commercial buildings represent the most significant opportunity for the energy efficiency market in the U.S., accounting for 40 percent of the U.S. electrical load and approximately $108 billion in annual energy spending. One medium-sized office building consumes the energy equivalent of 100 homes.
Approximately 30 percent of the energy used is wasted – mostly through simple actions such as leaving lights on or running heat and cooling simultaneously. The problem for utilities is that these saving opportunities have been historically hard to find and even more difficult to communicate to their customers.
To achieve the market and savings potential, utilities need to engage commercial customers on a mass scale. Based on our experience and work in the industry, utilities only have the time, budget and resources to engage between 10-30 percent of their commercial customers. Data analytics is providing the pathway to engage the other 70 percent.
Onsite Audits Limit Scale
Commercial customer engagement has historically been driven by the onsite audit, an inherently scale-limiting approach. These audits are created by doing simple building walk-throughs and are based on only a few days worth of data.
The result? They take months to deliver, are often poor in quality, and miss many of the savings opportunities customers should take. They’re also time intensive for the customer and costly for the utilities. This combination of factors erodes even the most enthusiastic customer’s will to act and limits their use to large organizations that are already on the path to engagement. This limits their use to large customers who are already engaged enough to work through to their results.
Utilities can only afford this approach for a fraction of their largest customers, leaving many large customers, and almost all mid-sized and small business, completely untouched.
Big Data Ushers in Commercial Customer engagement
Large amounts of data now available has made large-scale commercial customer engagement possible and is the key to unlocking the potentially hundreds of billions in energy efficiency savings in this market.
Simple meter data can be used to identify more comprehensive savings, engage a broader portfolio of customers, and generate a stronger uptake. Here at FirstFuel, we’re using advanced analytics to turn hourly interval meter data into detailed insights about buildings; identifying missed savings opportunities such as what times the lights are being left on, what temperatures activate the HVAC system, how the ventilation can be upgraded, and more. These are the hard to find, easy to implement saving opportunities that yield results without costing the customers.
By using this information earlier in the discussion, and prior to customer investment of time or money, the no-touch audit informs and engages. Commercial customers can now realize real insight into energy use, accompanied by specific energy saving solutions or actions at the outset. Interval data also serves as the foundation of an ongoing relationship with the customer. Utilities can deliver customized reports that track and measure building changes over time, providing a mechanism for follow-up on a consistent basis.
The data can also be analyzed and used to tailor engagement efforts at specific groups of commercial buildings – providing specific recommendations that resonate for different audiences. Large office towers will receive different recommendations from the pizza shop around the corner. This level of targeting is critical in achieving savings on a mass scale.
There are three primary market segments utilities need to focus on:
- Large Buildings: Big offices, federal/state buildings, universities, etc… These often have a common manager with multiple buildings in a portfolio. They’re characterized by complex and multi-million dollar energy bills. Successful engagement starts with an understanding of the energy use for the entire portfolio, prioritizing energy savings opportunities across a campus or syndicate of buildings. This helps justify customer projects and obtain investment capital – and is true engagement.
- Medium Buildings: Consists mainly of schools, municipal buildings, etc… These are smaller in size and consumption, but usually have complex systems. To reach this market, utilities need scale – pushing out energy-usage data to thousands of contacts at the same time. Big data enables the utility to use Internet portals as a two-way interface to engage customers deeply, generating leads and data-based prioritization that can be followed by sales reps.
- Small Business: The biggest, yet most overlooked portfolio, consists of the pizza shops, dentists offices and similar businesses. These are cost-conscious owners that are very aware of every dollar they spend on energy – yet lack insight into how the energy is been used. Utilities need to empower these businesses to self-serve, complete with benchmarks and education that connects their building to energy savings. But don’t confuse this with the consumer market – they require business-specific information tied to saving targets.
Commercial buildings represent the most realistic pathway to a more energy efficient future in the U.S. and big data is the key to unlocking the savings potential. Utilities need to embrace the availability and use of this data to engage commercial customers on a consistent and meaningful basis.
Swap Shah is co-founder and CEO of FirstFuel Software. He has 20 years of experience leading software companies and was a key founder of three companies that went on to an IPO or acquisition, including Open Environment (IPO), WebSpective Software and mValent. Swap holds a BS from Cornell University