It’s an exciting time to work in the energy industry. Decarbonisation, decentralisation, and digitalisation are driving changes in the market, challenging how people might experience energy in the future.
A key enabler of this change will be the technology people bring into their homes and how they choose to use it. We’ve been looking at the customer journey as people buy, use and experience problems with these technologies as part of our Future Energy Consumers work.
For us, there are three main themes emerging from the work – control, understanding and support when things go wrong.
Our research suggests automation can help people save money, when combined with real-time pricing.
That makes sense. It’s intuitive to think automation could address some of the things that stop consumers being flexible with their energy use. For example, we find over a quarter of people on legacy time of use tariffs, like Economy 7 and 10, aren’t confident when it might be cheapest to use electricity. Automation can help by removing some of the information consumers need to know. It also supports what we know from behavioural economics research, which suggests people are more likely to take an action if it is made easy.
But there are many reasons why giving people control will still be important.
It will be difficult to predict how technology might suit people’s habits and needs. When we examined people’s experiences of legacy time of use tariffs, we found almost 40% of people said it wasn’t practical to use appliances like washing machines at off-peak times. People cited issues like safety and noise as common concerns. Companies will need to think about the balance of automation and control and tailor their products to how people actually use them.
People won’t always pick services and products as a series of ‘one-off’ purchases. It’s inevitable there will be bundled packages, and that companies will collaborate to offer these packages. In these situations, control over technology still remains vital.
If we take ‘heat as a service’ as an example, people may still want to turn on their heating system on an ad-hoc basis. In addition, there will be times where people will want to use their heating for reasons other than warmth, such as drying wet clothing. Lack of control and ability to do so could frustrate the daily behaviours people may have and need.
We also know giving people control of the data they share helps build consumer confidence. Building tools to make control easy and accessible is an important protection people will need to engage with new technologies.
Consumers are not all the same. This makes it difficult to identify and communicate what the value and benefits of new technologies might be to an individual. A survey by TechUK suggests confusion over the value of smart appliances can be a barrier to uptake.
We’re currently testing the different ways that information can be presented to customers so we can support better industry practice as the market develops. This should make it easier for customers to work out what products and services are right for them.
However, it’s possible companies will need additional mechanisms in place to help their customers understand the suitability of products. For example, presenting future value based on customers’ usage data. Third Party Intermediaries (TPIs) could also play a role in helping consumers compare the value different products may offer.
As technology becomes more automated, companies will also need to think about how they can monitor and communicate what’s happening to their customers. It’s important consumers feel confident they are getting the outcomes promised to them and know how to access support when the product or service is new to them.
Support when things go wrong
If things go wrong, people need to know where to go. But as technologies and services begin to mix, knowing who to go to might not be obvious. For example, when a bill increases, the possible reasons for it might lie with an energy supplier, a third party offering an energy management services or the actual technology.
We find people use the word ‘manufacturer’ indiscriminately when referring to multiple organisations that might be involved in smart home technology and energy supply.
We also know in an increasingly interconnected home, it might not be easy to identify who or what is at fault. This means added confusion for consumers. Companies should think carefully about the diagnostic tools they have in place and how to refine the customer journey so nobody is left behind.
There should be access to independent advice and if problems need to be escalated to an ombudsman, it should be clear which company is responsible and what rights a consumer has.
Next steps to ensure consumer protection is up to scratch
We’re keen to work with government and industry to support the development of new technologies and services for consumers, as they become the cornerstone of consumer engagement with smart energy systems.
The themes identified in this blog and in our report should be considered carefully as industry build technology for a future energy market.
Dhara Vyas – Head of Future Energy Services, Citizens Advice