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I am the CEO of a company that works with utilities to build platforms to manage their efficiency and rebate programs. As consumer EV sales continue to climb, forward-thinking utilities are already incorporating electrification into their service offerings. For example, I’ve seen that some transportation electrification programs include rebate rewards that subsidize the cost of installations, while also offering customers enrollment in an EV rate, time-of-use rate or a different tiered-rate plan. Tiered options not only provide customers with choice but also have been found to assist utilities in managing charging by pushing loads off-peak and helping avoid building additional power plants.
While I believe these examples showcase promising advancements, the complex thinking and planning that brought these initiatives to fruition could remain elusive, as one pilot or program wouldn’t fit all utilities. Instead, utilities might also look to the success of non-EV programs in distributed solar, smart meter deployment or connected home devices to identify useful elements they can bring forward into their EV initiatives.
Benefit-driven communication is key.
When introducing any new technology or service, it’s essential to first understand that customers often resist change. So as a leader in the utility industry, aim to excite customers and work toward their interests as much as your own. I believe much of the reason smart meter deployments were met with resistance (such as those currently in the U.K.) was because companies failed to communicate to customers what benefits they could realize from the new devices.
I’ve seen a similar resistance shown with new or potential EV owners, as drivers do not always understand how rates for EVs are figured. They fear that their use of more electricity will cost more money. And as a result, they choose not to sign up and therefore can’t take advantage of EV rates. And for the utility company, non-adopters prevent them from using this economic lever to drive customer charging behavior toward off-peak times of the day when power is cheaper and in less demand.
According to a report by the Smart Electric Power Alliance, utility-owned community solar projects grew roughly 112% between 2016 and 2017. I believe this also underscores the need for communication that adapts to the consumer market.
In my opinion, community solar programs started slowly because they lacked clear frameworks and terms, which resulted in customers’ reluctance to participate. Without subscribers, financiers were reluctant to lend. The industry collaborated on solutions to these complications, which led to legal and transactional frameworks and the establishment of utility best practices. When Colorado, Minnesota and Massachusetts pioneered the implementation of these new solutions, private sector developers flocked to take advantage of the new programs.
Furthermore, I believe leaders should ensure programs are not too rigid. While customer choice made community solar accessible, it also became a hindrance. According to Utility Dive, long-term contracts, inflexible payment options and unpredictable pricing have served as considerable obstacles to specific community solar programs. These drawbacks counteracted the freedom of choice customers felt they should receive from the programs.
When developing a new transportation electrification program, it’s important to remember: It’s new. In my experience, customers will want to ease into adoption. So forgo any long-term commitments, and develop more risk-free, easy-entry pilot programs for customers.
How you serve your consumers can make a difference.
While it may seem obvious, remember that you’re offering a service, not just selling electricity. Your mission centers around making new energy programs easy for the end user to adopt.
A service-centered approach can apply to commercial fleets as well. I believe these electric buses and delivery trucks can increase electricity sales to utilities. Simply put, more electric fleets will mean more electricity and upgraded utility policies. However, the new points of load can also stress the local grid if utility service infrastructure is not upgraded at the depot.
While fleet owners and depot managers are well-versed in managing fossil fuel prices, they might not be experts in managing kilowatts. But from my perspective, utilities have an opportunity to support fleets throughout the process of preparing their facilities to handle larger electric loads for charging e-trucks and e-buses. This includes providing education on new rate tiers and demand charges they could encounter, as well as covering the costs of the electrical service upgrades at their depots.
I’ve observed that elements of the move to transportation electrification have not come swiftly for the utilities, and as a result, new startups are rising to fill the gap. For example, one San Francisco-based startup offers fleets a charging-as-a-service business model, where they manage all aspects of a fleet’s charging infrastructure and billing through a price-per-mile compensation model.
While this example is for electric fleets, I believe it can be applied to any form of transition. Simply put, electrification is different from many traditional diesel or gas programs. It requires a new form of education and assistance.
Technology and collaboration are vital.
Regardless of where utilities are in the process of developing transportation electrification programs, it is critical they do not design them in a vacuum. By leveraging best practices of the past and keeping the customer’s perspective in mind throughout the development process, utilities can provide both residential and commercial customers with programs and services that encourage and reward the adoption of more EVs in their service territories.
April 25, 2019 at 08:37AM
Forbes – Entrepreneurs