Utilities still have a long way to go in developing and implementing comprehensive, coordinated strategies around distributed energy resources (DERs), according to a study from market research and consulting firm E Source.
“None of the utilities included in the study believe they currently have a robust and integrated DER strategy,” says Alanya Schofield, senior director of strategy, consulting and products at E Source.
She adds, “About two-thirds of utilities are developing and implementing narrow and disjointed efforts, but they’re hampered by the lack of a clearly defined DER strategy, internal resistance to change, and limited dedicated resources. Most utilities have not made significant progress on a DER strategy despite the fact that the overwhelming majority are anticipating noticeable load and revenue reductions due to DERs in the next seven years.”
“Areas where we see the biggest gaps include consideration of business model and regulatory evolution, customer-experience analysis and planning efforts, and industry partnerships,” says Nick Lenssen, senior advisor at E Source. “These are critical elements of any successful DER strategy, and many utilities are not putting enough resources into these areas. We’re optimistic, though, that utilities will make significant progress in strategy development, given near-term plans to expand many of their current customer-centric DER efforts such as programs and offerings, educational resources, and technology pilots.”
Key findings from the inaugural E Source Utility DER Strategy Benchmark study include the following:
A solar perception gap. Utilities believe that they’re perceived as more supportive of solar than they actually are. Nearly two-thirds of utilities believe their residential customers would agree that their “electric utility supports its customers’ use of solar energy.” However, E Source says its research reveals that less than one-quarter of residential customers actually agree with this statement.
A growing focus on battery storage and electric vehicles (EVs). Although many utilities are currently focusing on rooftop solar, they expect battery storage and EVs to have noticeable customer impacts in the next seven years. This will drive utilities to almost double their battery storage pilots and programs and nearly quadruple EV-related pilots and programs over the next three years.
Lagging customer-experience efforts. The majority of utilities stated that “improving customer satisfaction” is an extremely important driver of their DER-related strategy efforts, but less than half are currently including customer experience analysis and planning in their DER strategies.
Evolving DER-related organizational structures. Currently, the majority of utilities have limited budgets and four or fewer full-time employees dedicated to customer-centric DER strategy work. However, nearly all believe that staffing and budgets will increase in the next three years.
E Source says the study included 28 U.S. and Canadian utilities, and the survey covered DER-related strategy efforts, utility and customer impacts, business model evolution, rate reform, communications and education efforts, programs and offerings, partnerships, and organizational structures and budgets.