Diversification of Utility Company Offering: Meeting Modern Consumer Needs

Ten years ago, consumers viewed electricity as a basic commodity that simply came from the wall, and bills arrived by post. However, after the 2022 energy crisis, energy has become more personal for most consumers.

Today, the majority of consumers want more control. A report by EY highlights that 81 percent of customers want their utility provider to play a role in enhancing their journey with new products and services. As a result, utility companies worldwide are re-evaluating their relationship with end-users and exploring new business opportunities to meet these dynamic consumer needs.

This blog post explores two categories of services that utility companies can offer to meet the needs of modern consumers: Smart Hardware and Software.

Smart hardware: growing in popularity for substantial savings

Households want to do energy renovations for a variety of reasons, but the main reason is often to reduce electricity bills. We'll look at the three household electricity resources that are most requested by households in Europe.

The list begins with solar panels. By installing residential solar panels, households can generate their own clean energy and sell back any excess energy to the grid. This not only saves them money on their energy bills but also reduces their reliance on fossil fuels. The solar boom has been massive in Europe, as households also look to become more self-sufficient in their energy matters.

Secondly, households may want to adopt energy-efficient heating and cooling solutions, such as heat pumps. In Europe, heat pumps are being used to replace old gas boilers, and thus these solutions not only reduce energy consumption but also provide a more comfortable living environment.

Thirdly, with the surge in electric vehicle adoption, the need for a home charger grows hand in hand. Not many EV drivers solely rely on public charging spots, as the infrastructure for public charging might be limited, especially depending on the location, and also public charging can be much more expensive than having a charger at home. This is why many households buy the charger after making the switch to EVs.

On top of these three energy resources, some households might want a home battery to decouple with their solar panels, or some other kind of home energy management system to be able to control consumption and time it to better hours.

Many utility companies in Finland and wider Europe have seen this need for new energy resources and have started selling these devices. This has become a major area of business for some utility companies, enabling them to diversify their offering and offer an even more complete service to their end-users.

Smart software: Unleashing digital efficiency to reduce energy costs

While the first utility company apps hit the market five years ago, the new trend is for utility companies to offer households smarter ways to consume electricity. This is due to several reasons. Firstly, electricity prices have become more volatile in recent years. Secondly, households are increasingly adopting new electricity resources such as electric vehicles and heat pumps, which require optimization services.

Today, utility companies must offer end-users an easy way to monitor and optimize their consumption. This can be achieved through web or mobile applications. Although most larger utility companies have developed mobile solutions, approximately 80% still offer consumption information through a web-based application.

These apps provide excellent opportunities to educate end-users and offer insights into their consumption patterns. They also promote responsible energy consumption and enable households to reduce their utility bills. For instance, by suggesting the best times to do laundry, dishes, or charge electric vehicles.

Norway has been a forerunner in offering smart electricity services to end-customers for several years, mainly due to the fact that most Norwegians have a spot-priced contract. In 2023, Finnish utility companies began offering these services to their end-users in addition to the existing third-party services.

By offering digital tools to end-consumers, utility companies stand to gain a lot, including increased customer satisfaction and retention, better customer understanding through data on how households use electricity, and new revenue/savings sources such as cash reward programs for fixed-price contract holders who wouldn't otherwise optimize their consumption.

The time to redefine the utility-customer relationship is now

To meet the demands of modern consumers, utility companies must expand beyond traditional electricity delivery. By offering hardware solutions such as solar panels, heat pumps, and home chargers, as well as software solutions like digital monitoring tools and smart electricity services, utility companies can provide a more comprehensive service to their customers. This not only improves customer satisfaction and retention, but also opens up new revenue streams for the utility company.

If you're interested in learning more about how your utility company can diversify its offerings and meet the needs of modern consumers, contact us here to discuss smart electricity solutions for your end customers.