Demand Flexibility & A Marketing Plan: They Go Hand-in-Hand

Energy demand is rising exponentially, driven by AI and data center developments, supply chain issues, electrification efforts, erratic weather, and temperature extremes. To meet growing demand, smart utilities employ demand flexibility programs like virtual power plants, demand response, or EV charging to meet electric demand, by leveraging distributed energy resources like solar, battery energy storage systems, electric vehicles and EVSE chargers, and smart home devices like thermostats and water heaters through a distributed energy resource management system (DERMS). Robust participation and enrollment are critical to programmatic development, success, and growth for the customer demand flexibility programs that leverage behind-the-meter DERs through a Grid-Edge DERMS. So, how can utilities grow their programs?

DER Market Growth

Analysts report that the U.S. DER market could nearly double by 2027. Last year, the EIA reported a 31.14% growth rate in solar generating capacity, which rose from 81.9 GW in August 2023 to 107.4 GW in August 2024. Likewise, battery energy storage systems nearly doubled in capacity in 2024, adding more grid-scale resources that utilities can leverage. While EV adoption is slowing, it is still growing worldwide and remains an inevitability over time as liquid fossil fuels become increasingly difficult to obtain. In terms of smart devices, market research indicates that more than 67.2m smart thermostats will be shipped by 2030, while the smart water heater market is expected to hit $48b globally by 2033.

Altogether, these statistics indicate a rapid growth in the DER market, irrespective of political pressures. In each case, more distributed energy resources mean more opportunities for utilities to leverage increasingly available technologies for load-shifting purposes. For example, approximately 10m Americans were enrolled in residential demand response programs in 2022, resulting in an aggregate saving of 1 TWh of energy.

What that actually represents is 1 TWh of energy conserved, energy that didn’t require costly energy market purchases or the use of an expensive to maintain and dirty peaker plant. Remember, this is only the start. With more DER adoptions, this potential only continues to grow, and through the use of functionality like Topline Demand Control, an innovative combination of a Grid-Edge DERMS, AI, model predictive control, and forecasting designed to optimize DERs at a granular level to ensure reliable outcomes, utilities are poised to meet increasing demand while defraying high energy market costs and enhancing grid resiliency.

The Importance of Customer Engagement

The J.D. Power 2024 U.S. Electric Utility Residential Customer Satisfaction Study indicates that customers are concerned about rising electric bills and the importance of communication. Mark Spalinger, director of utility intelligence at J.D. Power, said, “As electric utility costs continue to rise, proactive communication can help mitigate satisfaction declines. Outage text alerts, emailing infrastructure updates, and proactively communicating ways to save are a few great ways to help ease the effects of rising bills and show customers that their money goes beyond paying for only usage. Additionally, these communication topics tend to generate increased customer satisfaction.”

As a naturalized monopoly, customer engagement hasn’t proven as critical to utilities as they are now. According to a 2023 survey, customer service is critical to 96% of all customers globally. Per the American Customer Satisfaction Index, after reliable service, customers want things like:

• Website satisfaction
• Access to a reliable mobile app
• Tips on energy efficiency
• News on green energy initiatives and the environmental impact of their energy provider.

Furthermore, studies have shown that younger generations are progressively more interested in renewable energy or energy efficiency measures, which underscores a keen public interest in your demand flexibility opportunities.

Incentives

Incentivizing program participation is a huge step in developing your programs and is part of your customer engagement efforts. Incentives come in a variety of types but are most often things like:

• Billing credits
• Prepaid cards
• Device rebates

These incentives are designed to drive demand flexibility program enrollment and engagement. In return, customers are more likely to participate in grid events, especially when communication lines are clear and direct. For example, when Colorado residents were locked out of their thermostats, they were understandably angry. Conversely, in that same year, a state-wide emergency alert went out in California to curtail usage to ensure continuity of service, and customers overwhelmingly responded by participating; informed communities are more likely to work with you.

Growth Strategy

Make sure that part of your marketing strategy involves key performance indicators and metrics to assess the efficacy of your program. These metrics can inform utility program managers on the best times to run demand flexibility programs or demonstrate the successes of your customer engagement efforts, depending on your objectives. Put another way: Monitor your outcomes to better understand your challenges or opportunities for programmatic growth.

Demand Flexibility & A Marketing Plan Conclusion

Evidence indicates that clean energy deployments will lower utility bills and alleviate financial stress on utilities. Likewise, through demand flexibility programs and by using the right Grid-Edge DERMS, utilities can increase their revenue streams through concerted conservation efforts, energy arbitrage, and increasing the aggregate virtual power plant capacity to continue meeting need as electric demand rises. Step number one in this process begins with ensuring that customers are aware of your programs and interested in participating.

About The Author

With almost two decades of leadership, growth marketing, and communication experience, Amber Mullaney drives the strategy behind Virtual Peaker's marketing initiatives. A proud Texan native, she graduated from the University of Houston with a degree in Public Relations and Interpersonal Communication. She is passionate and experienced in managing brands, product lines, marketing programs, and driving cross-functional teams.

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