Fri 25 Aug 2017

Are energy utilities ready for the rise of smart home services?

 

Digital innovation has improved the lives of many of us, but there’s no question that some organisations have struggled to fend off disruptive new entrants. Energy utility providers have faced immense challenges, as new solutions to empower consumers have seen falling margins and cleaner, more efficient energy startups have eaten into the customer base.

Rather than defying the changing technological climate and desperately clinging to legacy systems, some energy providers are leveraging their market power to establish new ties with innovators, seeking to improve outcomes for consumers with tactical acquisitions and partnerships. The burgeoning home services sector is one such area where some utilities are beginning to invest, building a stronger presence under their brands to fend off new, powerful competitors.

Energy providers are leveraging their market power to establish new ties with innovators.

Energy utilities getting involved

Recognising the inherent potential of home services – and how it could impact energy consumption patterns – forward-thinking utilities providers and suppliers have started making tactical investments to ensure they are not left behind. In the U.K., Ovo Energy is taking the fight to the dominant gas and electricity companies with its acquisition of CORGI HomePlan, the third-biggest home services provider in the region, according to Sky News.

CORGI HomePlan, a company that installs and services boilers, thermostats and other related household technology, brings with it a well-established network of engineers and operate across the U.K. with an annual service plan for a nominal fee. Ovo’s acquisition signals a desire to expand on the traditional energy management offering from competing organisations, expanding its existing in-home solutions. The addition of boilers and other technology to the company’s current involvement in rolling out smart meters is something the CEO Stephen Fitzpatrick sees as an important move to ensure continued growth.

“We are incredibly excited to welcome CORGI HomePlan into the OVO family. The adoption of new technologies such as smart meters, heating controls, batteries, and electric vehicles will transform the market for both energy and home services,” he said in an official press release.

“By combining OVO and CORGI HomePlan’s brands and technology platforms, we are now uniquely placed to offer customers intelligent energy services to power their homes.”

Are moves like Ovo Energy’s enough?

The Financial Times notes that utility providers are facing increased pressure – from government to lower prices for households, as well as consumers themselves taking greater control with innovative technology and affordable renewable solutions. The question, for many, remains whether branching out into more diverse home services is enough to shore up eroding revenues.

According to a survey conducted by analysis firm Oliver Wyman, the answer is yes. Risk advisory firm Brink reports that bundling a range of energy solutions – including heating packages, intelligent tariffs and consulting services – can be a powerful motivator for prospective customers, influencing a third of respondents in their choice of utility. The tools are out there for consumers to manage their energy usage in a more cost-effective fashion, and having guidance and support from established providers seems to be a compelling option.

“[The partnership between Ovo and CORGI] offers many benefits for homeowners through an expansion of services and increased access to shared industry knowledge and technologies,” says Caitriona Deakin, CEO at CORGI Services.

Rather than fighting the incoming tide of connectivity and home services, embracing it and packaging it in a way that’s exciting for customers remains the most sensible option. With the rise of smart homes devices in particular, development is still happening at a furious pace, and it’s difficult to accurately predict what’s around the corner. The only sure bet is that change is coming, and energy utilities need to keep a close eye on what customers are responding to in order to remain relevant.