It’s hard to imagine, even a few years ago, that humans would be turning to a little internet-speaker-thing to ask questions like “What’s the weather forecast?” or “How many pounds are in a kilogram?”. Yet here we are. It has even become an international pastime: How can I control everything in my home without moving from the couch?
"Ultimately, it is all about putting more control in the hands of the consumer, and energy companies are doing so in three interesting ways."
We’re witnessing a new industrial revolution that bridges our physical and digital worlds. Sustainability, responsible consumption, and convenience are the hallmarks of today’s consumerism. We use sensors to track everything, and we implement software solutions to improve performance—connecting the physical with the digital to make what we have do more with less.
With all this in mind, we see energy companies redefining their businesses for a technology-empowered customer. Ultimately, it’s all about putting more control in the hands of the consumer, and energy companies are doing so in three interesting ways:
Until recently, the relationship between consumer and energy company revolved mostly around the payment of a monthly bill. While some consumers may have felt emboldened to install their own sustainable hardware, like rooftop solar panels, those efforts were generally few and far between. In Israel, for example, solar panels on homes are common, yet most consumers don’t use this sustainable energy for anything beyond heating water.
In contrast, most of the energy providers in Europe provide both electricity and HVAC to their customers. With the infrastructure already in place, it is easy to integrate this service into their customers’ daily lives.
Today, an energy company’s next step could be to support the self-sustainability of consumers using a smart grid. Solar panels, historically used by residential and business consumers for water heating are now also being gradually used to self-sustain homes for savings in electricity during the daylight hours.
By leveraging the energy harvested from solar panels, an entire building, street or block could be self-powered through a two-directional energy grid (sending and receiving harvested energy), reducing the capacity from the grid and even making energy production a profitable effort for the community.
As sources of energy expand to offer unmatched choice and competitive pricing, customers also expect increased control over managing their power consumption and costs. As a result, the traditional energy company is reinventing itself with new business models.
One iteration might be to partner with companies that offer home power management and customization services. Another might be to focus on smart appliances and an infrastructure centered around modern energy saving (think GE and its ties to hardware and manufacturing). Traditional energy companies might also take cues from technology leaders like Alphabet (Google), Microsoft, and Amazon, offering customers a DIY way to customize their energy spending habits in the home, generating revenue through a combination of hardware, software, and cloud solutions.
The connected home, therefore, seems poised to take on the energy sector’s next opportunity. Consumers expect new appliances to be internet-ready, energy efficient, and agile enough to fit into their existing smart-home network. Energy companies are accelerating to ensure their existing customers don’t look elsewhere for these products and services, shifting the conversation from service price to service value, and offering a more streamlined solution to both infrastructure and smart devices that make life easier.
Energy companies are also tackling the barriers that arise from moving houses or apartments on the consumer’s end. One approach is to develop a “pre-installed” smart home with a unified language across all smart devices. If you were moving homes all you would have to do is sign in to a single account that connects all of your old preferences instead of individually signing on to your devices like Siri, Alexa or Google. This would also facilitate small changes. For example, if you were to change the lightbulbs in your smart home from Siemens to Phillips, your settings and preferences could potentially migrate automatically.
Energy companies recognize that the traditional consumer-centered business is in the state of rapid transformation. But in order to act on this they must move fast. While their current infrastructure allows them to maintain a foothold in this shifting landscape, it probably won’t be long before tech giants will compete to become the default go-to brands for smart homes.
On the other hand, if you’re startup is developing any smart home devices or applications, energy companies might be your next big customer. You may consider developing a solution that could connect energy companies and smart homes altogether. Energy companies have shown their interest in engaging in smart home technology, and you could be just what they are looking for.