Commercial Renewable Energy Outlook for 2003

RE Outlook 2003 – No outlook for 2003 could go without a note of caution regarding world events or the short term economic situation, however, looking at underlying drivers there is cause for optimism for some segments, notably the commercial sector where a combination of factors could fuel growth above average historical rates.

RE Outlook 2003 – January 21, 2003 – No outlook for 2003 could go without a note of caution regarding world events or the short term economic situation, however, looking at underlying drivers there is cause for optimism for some segments, notably the commercial sector where a combination of factors could fuel growth above average historical rates. Commercial-scale electricity users will find themselves with more and more motive and opportunity to evaluate alternatives to traditional utility power and traditional utility customer relationships. Several factors contribute to this trend: such as lower tolerance for power quality, availability and reliability problems (real or perceived). Another is continued deregulation and/or equivalent regulatory pressure on suppliers to offer a competitive environment. This will result in new products, contract options and choices. Furthermore, there is a strong possibility that price volatility will result in creative offerings from suppliers and increased concerns by customers about rate stability. Any of these or other factors will serve to create a supply relationship schism, a decision point that will push commercial power customers to evaluate their electricity options with much more depth than they would have otherwise. As any good sales person knows, the first step in penetrating a long standing account is something that forces the customer to seriously consider the options, even if he is simply considering the incumbent supplier’s new offerings. A time of decision is a time of opportunity for alternatives. With electricity products and vendors up for review it will be a prime opportunity for aggressive suppliers to propose Renewable Energy options. From green power pricing contracts to on-site generation, new creative proposals are likely to get more consideration than ever before. Furthermore, savvy customers will be applying the sophisticated procurement processes that they use with other goods and services, a competitive environment not often applied to electricity in times gone by. This situation is tailor-made to capitalize on the full benefits and value proposition of Renewable Energy. We can expect many customers to be weighing far more than dollars-per-kilowatt propositions as attributes like quality, reliability and source diversification will be important parts of the decision. In addition, when given a choice, many companies are adding environmental criteria to their procurement process. As pricing schemes like time-of-day metering and peak demand pricing help drive up the value of on-site generation, other market factors such as consumer preferences for environmental responsibility create a receptive audience for a wide variety of value propositions for Renewable Energy products. As a result of factors such as price volatility, reliability and de- or re-regulation, we can expect an increasingly competitive electricity market in 2003. This may lead to large numbers of commercial users motivated or forced to evaluate their electricity supplier and to craft new procurement strategies. It is likely that many of these users will be receptive to value based proposals from aggressive suppliers where product attributes such reliability, price stability and environmental benefits will sway procurement decisions and help fuel higher than traditional growth for the commercial Renewable Energy market. About the Author: Kevin Hagen is an independent consultant specializing in Renewable Energy. Over his 20 year business career he has held senior positions in Business Development, Management, Sales and Marketing with leading manufacturing firms including Trace Engineering and Xantrex Technology. He is a 1983 graduate of Clarkson College of Technology with a background in both Engineering and Business. He can be reached at: kevin.hagen@verizon.net
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