Resourcefulness Insight Report: Leveraging Data to Increase Revenue

We are excited to continue our blog series that unpacks the six use cases outlined in the Itron Resourcefulness Insight Report. Each use case demonstrates how real-time insights are driving transformation in the energy industry and enabling utilities to better manage energy and water resources for their communities. The use cases include improving operational efficiency, developing new revenue streams, supporting sustainability and renewables, providing personalized customer insights, managing extreme weather and enabling smart cities.

The first blog of the series highlights how cities and utilities are making the most of data to improve operational efficiency. For our second blog, we’re taking a deep dive into why developing new revenue streams is top-of-mind for utility executives across the globe to aid in the challenges they’re facing today and the opportunities that lie ahead.

Energy and water utilities are in the midst of a fundamental shift. Although many of the negative impacts of COVID-19 lockdowns have subsided, some effects remain. The third biggest obstacle to deploying data analytics, according to utilities in the United States, is investment delays brought on by COVID-19. Additional challenges linger, including rising OpEx, the costs associated with integrating DERs, grid hardening mandates and more. To help navigate these challenges, utilities are seeking opportunities for new revenue streams – and they’re looking for data analytics to help guide them along the way.

Approximately 62% of the utilities we surveyed cited generating new revenue sources as one of their top use cases for data analytics. Finding additional revenue ranked second to increasing operational efficiencies as the most crucial use case.

A great example of this is the state of New York’s energy policy, which enables utilities to operate exchanges for buying and selling energy from DERs like solar panels. The policy is a result of a number of factors, including the need for a more resilient grid, a target to reduce greenhouse gas emissions, a response to choppy market conditions and a desire to encourage innovation in the energy space. But it also acknowledges that customers are exercising their right to more influence over how their power is produced, rather than merely saying they want it.

Engaging consumers in an intelligent way is required to ensure successful DER or energy efficiency programs that help stabilize the grid while integrating more renewable energy resources. There will always be external elements that affect the cost and constraints of doing business but predicting what customers will want and need is at the core of most business growth areas. This means the time to analyze real-time trends and data is now.

Deriving insights from data that utilities already have is key to helping them determine where their next source of income is coming from.

Here are four areas where data analytics can help grow and expand utility businesses:

Electrifying carbon-intensive power sources. First and foremost is EV charging, which will increase in sales and demand as the EV market continues to accelerate. A typical light duty EV owner who drives 12,000 miles a year would consume between 3,000 and 4,000 kWh over 12 months. Utilities can also promote swapping fossil fuel-burning power sources with cold-climate heat pumps and other technology, some of which they may sell. With analytics, utilities can predict payback timelines and even develop models to provide these offerings as a service rather than selling them outright—which would ensure ongoing revenue.

Making the most of DERs. Investing in wind and solar farms and selling the electricity to customers or even other grid operators are options to consider for monetizing DERs, depending on local legislation. Solar panels can be installed and leased by utilities for residential and commercial customers. In addition to increasing grid resilience and encouraging the development of microgrids, this provides utilities with more opportunity to increase and manage revenue streams, such as the installations of combined heat and power (CHP) sources. Analytics that provide consumer insights can help determine optimal pricing schemes, develop microgrid options and identify the best locations for distributed storage.

Online Marketplaces. More utilities are entering the market for selling and maintaining smart devices. By 2029, this sector is estimated to be worth $468 million globally. Consumers can purchase voice-activated light bulbs, EV charging stations, smart thermostats and smart home environments. Even though it’s challenging to compete with big-box retailers, utilities have a significant advantage: to buy new energy solutions, utilities are where 50% of consumers say they would initially look. By leveraging household use data, utilities can identify the consumers most likely to benefit from marketplace products, and market to them individually with projected energy cost savings and carbon emission reductions.

Selling Expertise. Through regulated companies or deregulated entities, utilities can market their expertise through services like weatherization consulting (and related upgrades) and smart home sign installation. Some utilities even offer wiring and HVAC repair with a special emphasis on maximizing energy efficiency. Analytics allows utilities to analyze granular usage data that can reveal consumers who would likely benefit from value-add services.

As more utilities seek guidance for additional revenue streams, the answer lies with their customers. It’s key to actively anticipate what customers will want and need, and no one is in a better position to do that than utilities using the data they already have. Stay tuned for the next blog of the Itron Resourcefulness Insight Report series to learn about the critical role data analytics play in driving conservation and sustainability efforts forward.