Friday, September 9, 2011

Smart grid in Europe: what can we learn about customer engagement?

Last month, GTM Research published its latest assessment of the European smart grid market. The industry analysts expect spending to reach €3.1 billion ($4.2 billion) in 2012, and increasing to €6.8 billion ($9.2 billion) in 2016, but aside from these impressive numbers the report also makes an important observation.

“While the majority of national markets in Europe are advancing smart grid goals, few if any have meaningfully engaged the end-consumer,” according to the study’s lead author, Jan van der Zanden.

This comment points to the European focus (so far) on more utility-side applications while the smart grid enterprise in the US has largely been characterized by smart metering, home automation and other customer-facing applications. However, despite this focus, American utilities have had limited success, for example, in getting customers to sign up for demand response programs.

So, the Europeans might have a look at what their US counterparts have done, but what might be even more interesting is to see if any of them score successes that could be replicated in North America.

I’m thinking in particular of the conundrum in which the residential customers who represent the greatest potential for energy and costs savings are the ones for whom the “save money” argument is least effective. To put it more bluntly, if you live in a 5,000 square foot home, chances are the monthly electricity bill is not a major expense. Given how reluctant we humans are to change our behavior, the question becomes how to motivate these customers on the basis of something other than simple financial gain.

If our European colleagues find a solution to this one, it would be well worth importing.


  1. The simplest solution may be to heavily tax energy, making it worthwhile to consider it in home budgets.

    But even better tools seems to exist: peer pressure:
    "A startup called OPower has learned that by mailing utility customers personalized reports on their energy consumption -- and then by comparing them with their neighbors -- people can be persuaded to save energy, reduce emissions and help fight global warming.

    Energy hogs learn that they are most wasteful than the Joneses. Energy misers get smiley faces in the mail, and they want more."

  2. See also