Leaving the Grid: How Utilities Can Manage Grid Defection in the Age of Solar

According to a recent report by the International Energy Agency, renewable energy is expected to deliver about 28 percent of the world’s electricity by 2021 — up from 23 percent last year. There’s no question that consumers have shown increased interest in leveraging renewable energy solutions over traditional generation services, citing reasons such as reduced carbon footprints, cost savings and even aesthetics.

With adoption of renewable solutions already taking off in the residential market, we can surely expect adoption by the commercial sector to follow. In fact, a recent report by the Solar Energy Industries Association (SEIA) found that America’s corporations are choosing to install solar now more than ever before. In the first three quarters of 2016 alone, the report found 142 MW of corporate solar was added in the U.S. — which is more than was installed in all of 2015 (129 MW).

Further adoption of renewables in the business sector is very likely as we see providers take measures to simplify renewable installation processes. For instance, Arcadia Power this fall launched a solution that enables renters across the U.S. to buy solar energy. With many businesses leasing space in shared buildings, this kind of solution could have a huge impact on the ways in which companies select their power sources.

With mounting interest in renewable technology from the business sector — which represents roughly double the residential sector — where can utilities deliver value?

More Renewables, More Questions

As more businesses lean toward renewable solutions, we can expect more questions around how to keep the lights on. Renewable solutions are based on volatile conditions, such as wind and sun. Given that these varying conditions mean varying power availability, utility customers will need an educated source who can share insight into ways they can best manage their energy supply and optimize their usage.

To become a trusted advisor on solar, utilities will need to leverage data analytics to evaluate the different resources in the system and provide business customers with insight into the amount of power needed to meet load requirements cleanly and efficiently.

Avoiding Disintermediation

Utilities — which already manage years’ worth of energy data — have a unique opportunity to provide services to businesses. They are best positioned to help customers understand how to lower their energy bills and maintain or improve their reliability — two of their real goals of adding renewables. In order to become a credible energy partner, utilities will need to pivot to stay relevant — focusing more on where they can act as objective consultants for renewable solutions and better advise business customers on questions that may arise when making the switch to renewable solutions.

Using customer intelligence, utilities can become trusted advisors by delivering personalized recommendations to optimize their customers’ energy mix. Access to current and historical individual customer data uniquely positions utilities to do this — provided that they understand how to transform that data scalably into insights that can be easily shared with customers. Leading utilities are already realizing that achieving this transformation requires smart investments not only in technology, but also in training, service and marketing processes required to make the full translation from data to customer impact.

When it comes to renewables, the conversation often drifts to grid defection, or who is going to “leave the grid.” However for business, this is only the most extreme of outcomes. Business customers are perhaps more likely to be disintermediated from their utilities and it is especially urgent for utilities to adapt to this new market environment. By repositioning themselves using their trusted relationships, data and smart, unique value to customers, utilities will stay relevant to help their business customers. As they have in the past, utilities can be the place customers continue to go to make smart energy decisions for their business.

Lead image credit: Jon Callas | Flickr

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Indy is a technology executive focused on strategy, marketing and sales of new technologies.  Prior to joining FirstFuel, he was a Principal at The Boston Consulting Group, where he drove efforts to launch and grow businesses in energy, software, security and semiconductors with several Fortune 100 clients.  Through his work at BCG, Indy led teams that devised new technology strategies, developed IP portfolios, oversaw new acquisitions and re-aligned sales forces to optimize growth and capitalize new markets.  In addition, Indy has worked with a technology-based startup and a venture capital firm. Indy holds an MBA from Harvard Business School and a BS from the Massachusetts Institute of Technology.

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