According to the International Renewable Energy Agency (IRENA), solar photovoltaic (PV) prices declined by 90% between 2009 and 2018. And, between 2015 and 2017, the cost of installing small-scale battery storage systems fell by 60% in some regions. These trends are expected to continue over the next decade, with self-generating power reaching cost parity with grid-delivered electricity as early as 2021. This puts the possibility of grid independence within reach of even more consumers.
Community energy schemes are taking off too. US Government-run community choice aggregation programs (CCAs) give communities control over their local energy needs. They allow communities to set their own rates, reduce carbon emissions thanks to renewable energy and save millions of dollars in energy bills. Nearly eight million households in California are now served by CCAs, taking a considerable chunk out of incumbent energy companies’ market share.
Meanwhile, businesses are showing keenness for power purchase agreements (PPAs). These change the relationship between the energy company and the customer from one of direct supply, to one which tops up the renewable electricity if needed. Led by the US and the Nordics, a record 7.2 GW of PPAs were signed between January and July 2018, a third more than during the whole of 2017.
Digital technologies are also improving customer engagement. Accustomed to the level of service they experience in other industries, customers are demanding more from their energy companies. This is particularly true for the millennial generation who, compared with other age groups, indicate a higher preference for interactions by smartphone and are more influenced by online reviews, peer recommendations and price/product comparisons. With millennials entering their prime spending years, this will have a profound impact on the way energy companies interact with customers.