By Ross Dudley
Over the next 6 years, as part of a nationwide rollout, UK energy customers will be fitted with a new smart meter and told about the benefits it will bring to their home. However, in a recent BBC article*, politicians warned the public that installing these meters may only save them 2% on their annual bills - considerably less than expected.
What the article failed to elaborate on, were the additional benefits gained from the new services and business models enabled by smart meters.
Opportunities beyond installation
Whilst the roll out represents modernisation for the UK energy infrastructure, the USA has already experienced this and fostered companies like OPower to develop smart energy reports that have seen an additional 2-3% sustained decrease in energy use. Similarly, UK based Onzo has developed an itemised energy report that uses the meter data to track appliance spend (i.e. how much your dishwasher or hairdryer cost to run each month) an innovation that could lead to less energy waste within the home, and even promote the purchase of more energy efficient products.
Even though these smart services, and others like it, present a potential for savings, the meter technology itself also reduces costs. The end of estimated billing is expected to reduce inbound calls regarding bill shock, and remove the need for face-to-face meter readers. Naturally, the meter hardware itself will need to be paid off over time, but once this cost is met the operational savings can be passed on to the customer.
Opening up new pricing models
UK utilities are also yet to offer smart Time of Use (ToU) tariffs, which would allow the meter to apply a different unit cost each hour or even minute – directly matching the cost of power generation. This would mean increasingly astute customers could save pounds by avoiding the Coronation Street kettle break** or waiting until a 2am sweet spot to turn on their washing machine. Combine this with an automated home or smart mobile application, and we could see customers taking control of their energy spend much easier than ever before.
Whilst we can agree that there is no stopping the change in the market, with a Government enforced roll-out starting next year and completing in 2020, it is inevitable that smart meters will put more power and knowledge in to the hands of consumers. If designed well, smart meters will give utilities the opportunity to lead the market beyond basic savings.
So how do you move from good to great?
- Design service wrappers to compliment the impact of your smart meter initiative
Use the data generated by the meter to create actionable interventions that are much more engaging than just an accurate bill. Billing alerts, online dashboards and insight reports are all current services where customers have been given more control and confidence beyond the meter itself.
- Develop a strategy beyond unit price
Use the installation process as an opportunity to learn more about your customers’ needs. Record information around comfort, convenience, and environmental motivations and use it to develop a proposition beyond cutting costs. This will combat the predicted rise in ‘price optimisers’, which will exploit the same-day switching ability made possible by smart meter technology.
- Take the opportunity to become more advisory
Compliment the usage data on a customer’s bill with education and guidance. With the vast amount of data that will be harvested, UK utilities will be in the strongest ever position to educate and foster smarter customers. Now that spend will be accurate, customers should be provided with options on what they can do about it, and fundamentally, what they should expect (i.e. is the increase in spend temporary, seasonal or sustained?).
- Integrate smart meter data with your customer servicing channels
Use smart meters to establish when customers will be at home, and time courtesy calls accordingly. Identify patterns in their usage to tailor offers or help colleagues problem solve a billing complaint more holistically (i.e. your usage is 10% greater than last month, however, it is in-line with our predicted seasonal average…).
- Use the smart meter as a secure gateway to send data to 3rd parties
Broker partnerships with organisations that will value the insight that can be recorded within a customer’s home – even customers themselves. Start-ups are already experimenting with data transferred through smart meters to inform assisted living, heating control and health monitoring propositions.
Want to know more? Engine Service Design has helped companies, including E.ON, to develop their own smart meter roll out experience and what that might mean for different customer types. Contact our Client Service Director, Paddy Whiteway, at email@example.com for details.