On May 3rd, 2019, Tendril announced the agreement to acquire EnergySavvy in a strategic move to gain more market share in the competitive utility home energy management space. Tendril’s core offerings have been focused on residential customer engagement products and services, which provide personalized energy efficiency and demand side management products and programs. The acquisition of EnergySavvy brings advanced personalization capabilities to the Tendril Platform.
HEM Offerings Increasing
Demand side managing (DSM) is nothing new to utilities. However, home energy management (HEM) offerings have been on an upward tick in recent years as utilities and technology vendors see opportunity at the residential level for energy management products and services. According to an IDC worldwide survey, in two years, more than 9 out of 10 utilities will have deployed Comfort as a Service to better serve their residential customers. The “Comfort as a service” business model for the residential market is the end-to-end management of home energy needs, including but not limited to sales, installation and maintenance of DERs and devices to consumers.
Customer Engagement Tools No Longer Just for Non-Regulated Suppliers
Customer satisfaction and customer engagement programs have historically been used as a tool for non-regulated retail energy suppliers to differentiate themselves in competitive markets. This is especially true in Europe’s competitive energy retail market, where new entrants emerged as viable competitors to incumbent players specifically targeting unhappy customers.
However, in the US this has changed in the last few years with regulated utilities investing more in customer engagement programs and products. Much of the customer engagement and customer satisfaction efforts from utilities has been driven by regulatory incentives in regional US markets. Regulated utilities are being incentivized by state regulators to implement customer engagement programs with the goal of improving customer satisfaction scores.
New Digital Priority Brings Increased Competition to the Utility Industry
As digital transformation in the utility industry evolves, competition for who owns the residential customer relationship will continue. Utilities, vendors in the utility space as well as automated home technology players such as Google and Amazon are all battling to own the residential utility customer relationship. There have been strategic acquisitions in the residential utility space in recent years such as Oracle’s acquisition of Opower and Itron’s acquisition of Comverge. Consolidation of vendors and increased competition in this space will continue as customer engagement and customer satisfaction are becoming a higher priority for utilities.
The changing needs and wants for the utility customer is creating an opportunity for residential energy management players. Giving utility customers choice on how they consume, produce and also sell energy back to the wholesale or retail markets is changing the characteristics of the typical residential utility customer. Advance energy management technologies and analytics combined with better customer communication channels such as what Tendril and Energy Savvy provide are changing the types of products and services that are offered to residential utility customers for the better.
Evolving customer engagement products and services will continue to emerge and potentially can provide new revenue streams for utilities. Expect continued investment in this area by utilities and increased adoption of home energy management offerings. The utility customer engagement effort will continue with the next generation of residential energy consumers being more tech savvy, interested in lower energy cost, having transparency in their energy use and pricing while making efforts to lower their carbon foot print.