Chapter 1
The 'three As' of energy
Consumers are losing faith in the three fundamental aspects of the energy experience.
The problem is this: 70% of the outcomes of the energy transition depend on people changing their behavior. Half of consumers’ impact comes directly from shifts in how we power our homes and get around. But the majority of consumers say they’ve already done everything they can.
Sixty-five percent of people we surveyed say they know how to start making sustainable energy choices, but 70% told us they are not willing to spend any more time or money on doing so. It seems consumers are struggling to see the payoff for their efforts so far. Many say the energy system just isn’t delivering on the three fundamental aspects of the energy experience: affordability, access and appeal.
Affordability
67%of consumers say they can’t absorb a bill increase of 10%.
Access
18%would adopt energy products if they were easier to purchase and install.
Appeal
77%want their energy provider to offer low-cost energy options.
Affordability
Affordability is about more than price and considers how energy impacts a consumer’s broader financial wellbeing and lifestyle.
- 67% of consumers say they can’t absorb a bill increase of 10%.
- 30% are confident that their energy will remain affordable.
- Two-thirds aren’t planning to invest in new energy products, such as rooftop solar or electric vehicles (EVs), over the next three years.
Access
Beyond physical availability, energy access also spans education, awareness, choice, data and insights.
- 26% of consumers have a good understanding of terms such as renewable energy and sustainability (this figure has not improved over the three years EY has been tracking it).
- 33% are confident they can access clean energy options. Renters and people on low incomes are two to three times less likely to say they will invest in new energy solutions.
- 18% would adopt new energy products and services if they were easier to purchase and install.
Appeal
Consumers are diverse — and often irrational. Creating appealing energy options means understanding the complicated drivers of human behavior.
- 77% of consumers want their energy provider to offer low-cost energy options alongside high-end products and services.
- 67% of consumers want personalized energy solutions.
- 70% of consumers would like subscription-based energy bill options.
An energy system that isn’t affordable, accessible or appealing doesn’t inspire consumer confidence. We found consumers in nearly all markets are less confident in their energy future than they were a year ago. This is important because confident consumers are more likely to invest and take action. (Read more about the Energy Consumer Confidence Index and how it is calculated here.)
The ‘frozen middle’ may halt the energy transition
The good news is that consumer fatigue hasn’t extinguished hope for the future. Consumers told us they are excited about the potential of new energy solutions — but want partners to help. Energy providers that step up, becoming trusted advisors on the energy transition journey, can accelerate change and find new opportunities for revenue growth.
But it won’t be easy. Energy companies’ position as the favored providers of energy products and services is eroding. Consumers are now almost as likely to look to others — nonprofit and community organizations, solar companies, home improvement retailers and online shopping sites — for energy experiences and solutions.
Developing a deeper understanding of diverse values and drivers is the first step toward winning over consumers. We’re all becoming omnisumers — participants within a dynamic energy ecosystem across places, solutions and providers.
Winning over consumers starts with developing a deeper understanding of diverse values and drivers. We’re all becoming omnisumers — participants within a dynamic energy ecosystem across places, solutions and providers — but in different ways. EY research identifies five “ecoEnergy” profiles:
- Champions and Enthusiasts are highly engaged, have made significant changes to their lifestyles to be more sustainable, and are twice as likely to pay a premium for green products and services.
- Novices are resistant and energy-agnostic, and have the lowest levels of literacy around sustainable actions and investments.
- Bystanders are resistant to aspects of the energy transition and have the lowest confidence in the value they see being delivered.
- Allies are most likely to feel they are prevented from engaging in the energy transition, due to their living situation or income.
Together, Novices and Bystanders make up over one-third of consumers and are the “frozen middle,” resisting change due to indifference, skepticism and inertia. Warming these consumers to the benefits of new energy products and services highlights the pitfalls of the traditional approach of targeting early movers. Instead, more sophisticated campaigns and targeted value propositions are required to engage all consumers and support everyone through the upcoming decade of disruption.
Chapter 2
Three priorities to reshape for the future
Providers must take urgent action in these key areas.
Most providers don’t have the capabilities or operational models needed to take a more sophisticated, nuanced approach to consumer engagement. Companies are investing heavily in preparing for a new energy future, but much of the focus is on the technology that will enable change, rather than the human element that will underpin it. It’s time to redress the balance and create genuinely consumer-centric providers that can take the lead in activating every consumer’s participation in the energy system. Three areas of action can help, but the pace of change means these are not sequential steps — companies must do everything, all at once, and quickly.
1. Reinventing the basics
When forced to trade off aspects of their energy experience, consumers still prioritize affordability, reliability and service. Boosting the basics is the foundation for increasing consumer confidence. Key steps can help:
- Prioritize transparency, simplification and automation. Create pricing options that are easy to understand and navigate. Simplify processes and use robotic process automation (RPA) and digital enhancement to elevate both the consumer and employee experience, and unlock value.
- Enable one-and-done, set-and-forget and ongoing experiences. Design diverse experiences focused on pre-emptive and proactive engagement in moments that matter.
- Expand the toolbox to address reliability and affordability. Leverage incentives and technology to position energy-efficient products and services (e.g., solar, batteries and heat pumps) as solutions to reliability and affordability challenges.
2. Onboarding the new
With better basics, providers can focus on the capabilities, partnerships and technologies that establish them as trusted advisors across the energy product lifecycle: awareness, purchase, installation, use, maintenance, recycling, refurbishing and removing. Key steps can help:
- Enable effortless experiences end to end. Become a consumer champion, driving the development of an energy ecosystem that overcomes energy solution adoption hurdles (e.g., permitting, financing and installing) for every consumer.
- Tap into grassroots engagement. Work with local networks to design and promote programs that meet the wants and needs of diverse consumers and ensure an equitable, inclusive energy transition.
- Industrialize consumer personalization. Tailor marketing, sales and services across channels based on effective but manageable customer groupings. The path to success is automated, cost-effective industrialized personalization.
3. Scaling for outcomes
The next decade will see much testing, learning and pivoting within the sector, but a structured approach to scaling for outcomes is critical. Key steps can help:
- Plan for a future enabled by generative AI (GenAI). The majority (69%) of consumers are ready for AI to be part of their energy experience. Develop potential use cases, evaluating build, buy and ally decisions against the evolving ecosystem. Trial with employees before moving to consumers.
- Align business ambitions with technology planning and delivery. Identify and build technologies needed for future energy experiences, including cloud and as-a-service platforms.
- Set a “North Star” operating model. Define and commit to your new operating model for the energy transition.
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Summary
The build-out of renewables is booming. Now we need to direct equal attention to the consumers’ role in our changing energy system. EY research shows there is an opportunity to bridge the gap between consumers’ interest in sustainable energy and their willingness to take tangible action. Energy providers that focus on three priority areas can engage, activate and inspire consumers to play a pivotal role in accelerating our collective journey to a clean energy future.
