What Is Customer Targeting?
Customer targeting uses meter data to identify customers most likely to benefit from energy efficiency or demand response programs or other interventions. The resulting analysis allows utilities to optimize offerings and maximize savings potential to meet carbon reduction, grid stability, equity, and other goals.
The Urgency of Adoption Is in the Savings
Recurve's recent study of four ComEd energy efficiency programs found that customer targeting using pre-program AMI data effectively identifies customers with the highest savings potential. And focusing on the participation of top customers while avoiding incentives for those who aren't a good fit for the program can significantly increase program impact and cost-effectiveness. The study also showed that failing to identify customers who will benefit can lead to wasted resources and minimal program impact. Customer targeting is the best place to start if utilities want to maximize equity and grid impact per dollar spent.
The analysis showed that the highest savers (top 25%) would save three times (3x) more than the other 75% — and we can identify who those top customers are in advance.
Targeting Can Maximize Equity Impacts
Energy efficiency programs have many benefits but can also negatively affect low-income and marginalized communities. Not all customers are alike; unfortunately, many low-income customers don't see the savings promised. A good number even see bills increase after interventions, as demonstrated by a study conducted by TECH Clean California.
The good news is that we can maximize equity. Recurve's recent ComEd study found that targeted customers (top 25%) in the Income-Eligible Weatherization Program saw more than double the average savings of the rest. Equity goals should give every customer who will benefit access to solutions and not push solutions to all customers regardless of whether they will have a good outcome. Program administrators can use this information to avoid promoting interventions to someone who will see little to no benefit or adverse effects.
How to Apply Targeting
Imagine a utility that would like to optimize its weatherization and air conditioning efficiency programs. A backcast analysis might determine that the customers who saved the most had the largest total annual energy use or whose baseload was lowest compared to peak use times.
To optimize program results, a manager could refine and direct marketing and outreach for its weatherization program to zero in on potential customers who use the most energy annually or much more during peak periods than their baseload consumption.
On the other hand, a backcast analysis might discover that the highest saving customers in an air conditioning replacement or tune-up program are those who had the highest summer energy use. Directing outreach for these programs toward potential customers with similar usage profiles increases the likelihood of those customers being high savers.
Once program administrators identify which customers will achieve significant savings and will be cost-effective for ratepayers as a program, it is possible to:
- Target customers who will have good outcomes and be cost-effective for the program.
- Market directly to customers who need the solutions AND will benefit. For example, marketing could use targeting data to focus on customers with high summer usage who would specifically benefit from AC and insulation.
- Give trade allies the information they need to target high-impact customers effectively.
- Avoid installing solutions that won't increase customer savings and may increase energy bills.
Beyond these benefits, targeting allows programs and utilities to identify those customers most likely to offer peak reductions and other benefits to the grid. In an upcoming blog, we'll explain how targeting allows utilities to optimize programs to achieve peak reduction targets, stabilize the grid and achieve decarbonization goals.