Utilities Are Embracing Green Energy Programs

A new report from FT Energy provides utilities with marketing strategies for green energy programs.

BOULDER, Colo., Nov. 13 — Just six years ago there was no such thing as green pricing — the concept of selling renewable energy at a premium. Today, there are at least 100 different utilities in North America offering green energy products in both regulated and restructured energy markets. Some green pricing programs have done phenomenally well — selling out their green capacity and acquiring long waiting lists for more — while others have floundered. A just-released report documents the keys to success — and failure — for green energy programs. In the latest of a series of reports on how to successfully sell green energy, E Source (a trademark of FT Energy) shares the most effective program design points for utilities selling green energy in regulated markets. In “Making Green Electricity Programs Work: The Experts Speak Out,” E Source researcher Dr. Paul Komor presents a concise compilation of recommendations culled from years of watching the market develop as well as from numerous interviews conducted specifically for this report. ‘This report could not have been written 12 or 15 months ago,” according to Komor, “because the experience base just wasn’t out there yet. Now, having watched some green energy programs sign up tens of thousands of customers, while other programs languish, we were able to draw some useful conclusions about differences between these programs.” Findings include: — On average, utilities should expect to pay $30 to $70 per residential customer sign-up. Most North American programs are currently seeing 1 to 5 percent of their residential customers participating, but most of these programs are also running low on green capacity and therefore have cut way back on their marketing. — Bill stuffers and bang tails (the tear-off forms on return envelopes) work well for getting the first round of sign-ups. More important, they provide intelligence on who is signing up, allowing you to go back and target those segments with direct mail or other targeted marketing techniques. It’s therefore essential — before the bills are sent out — to set up databases to track and assess who responds to the first round of mailings. — Partnerships with environmental groups add credibility, provide access to potential buyers, and can help with program design. Failing to get their support can lead to fatal political problems. Bring them in early in the program design process; it may slow you down initially, but it will help you in the long run. “In some ways, the most useful recommendations may be what not to worry about,” continues Komor. “For example, we learned that churn rates among green energy purchasers are no higher than they are for typical customers, so this eliminates what was once a major concern for those starting a green energy program.”

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