Dive Brief:

• Residential distributed energy resources, especially EVs and in-home batteries, could make up for the expected growth in peak energy demand by 2035, and at a lower cost than building new infrastructure, according to a new report by Deloitte.
• Capitalizing on these resources will require most utilities to invest in customer engagement more than they have in the past, said Christian Grant, a principal in Deloitte’s power, utilities and renewables practice and one of the report’s authors.
• Utilities can employ social media, data analytics and other related technologies to improve communication with residential customers and create DER programs tailored to more specific customer segments.

Dive Insight:

For many utilities, decarbonizing the grid and meeting the energy needs of the future may require a more personalized, hands-on approach to customer relations.

Utilities have long negotiated one-on-one with major industrial and commercial customers, but capitalizing on the growing potential of distributed resources like EVs and residential batteries will require increased coordination with residential customers, according to Deloitte. This is a rational approach for utilities, Grant said. Given ambitious decarbonization goals, most utilities looked for projects with the greatest individual impact.

But today’s utilities face a different paradigm, Grant said. While interconnection and permitting backlogs have held up larger renewable energy and storage projects, residential batteries, EVs and some appliances can soak up renewable energy when it is abundant, and return it to the grid when needed, according to Deloitte. These resources, the Deloitte report says, could be deployed faster than utility-scale technologies and for a fraction of the cost — and EV capacity alone could satisfy peak demand by 2035 if bi-directional charging is adopted at scale.

This isn’t to say that convincing residential customers to sign up for bi-directional demand response programs is going to be easy. Grant said utilities will likely need to invest more time in community engagement and in reaching out to more diverse stakeholders — even if that means devoting more time to processes such as rate cases or increasing the frequency of resource planning exercises. Reaching out to overlooked community organizations like unions can yield important insights into how a utility is perceived and whether residents would participate in demand response programs, Grant said.

In addition, new social media and analytical tools give utilities more options beyond basic legwork to improve customer relations, Grant said. Social media can help utilities crowd-source information about their reputation or customer expectations, he said, while more sensitive data analytics could help utilities develop programs that are more closely tailored to the needs of specific groups of customers.

Grant also noted the importance of considering equity for diverse and lower-income customers when creating incentives or even selecting neighborhoods for pilot projects.

“Leaving folks further and further behind is not the right thing to do,” he said, “and if we look at it from a business standpoint, it is only going to create more costs and challenges for everyone.”

This isn’t to say that utilities should neglect their commercial or industrial customers, Grant said. Many larger customers have access to a growing array of options for energy procurement, and these customers may go elsewhere if utilities are unable to meet their expectations or timelines.

“We’re not saying in lieu of or better than, we are saying in addition to, because … the future has so many unknowns and changes that we need to pursue all three customer classes with equal vigor,” Grant said. “When you do look at the residential customer class, there are these opportunities we see that could exist.”