The COVID-19 pandemic exposed what most utilities already knew–low to moderate income (LMI) customers carry a proportionally higher energy burden. Not being able to heat or cool a home to a comfortable temperature can have significant impacts on well-being and health.
Uplight research found that in 2021, 32% of lower-income customers reported struggling to pay an electric bill–three times the rate of higher-income customers. Not only are LMI customers having trouble paying their bills and reducing their energy usage, but also navigating the utility resources intended to help them.
Money left on the table for LMI customers
Energy providers often have a whole suite of LMI-specific programs and offers around energy-efficiency, rates, and payment plans, and are often expanding them to include access to low-cost solar energy, energy efficiency loans, free or reduced cost LED bulbs, and discounted smart thermostats. These offers can have significant savings and discounts for this segment.
However, these can be hard to find, even for the most web-savvy customer. And once a customer finds an offer, it can be difficult to understand the eligibility requirements and even more challenging to complete the enrollment process, which can involve manual paperwork and even going through a third-party.
LMI customers lack awareness
For many utilities, tactics that have worked in the past aren’t sufficient to drive the customer engagement and participation targets that utilities have. As a result, LMI customers are less likely to know about and participate in utility programs than other customers.
Uplight research found that LMI customers are less likely to know about energy saving resources available from their utility. Roughly 10% fewer LMI customers have used tips and are aware of or have used rebates. LMI customers also showed lower awareness of online audits, Home Energy Reports, marketplaces, electric vehicle support, time of use rate plans, and demand response programs.
Just 17% of LMI customers looked to see if they could change their rate.
Uplight Research 2021
This gap was also reflected in efficient purchases. Less than 10% of LMI customers surveyed reported purchasing LED light bulbs in the last year, and only 13% reported purchasing smart thermostats. While 72% of LMI customers agreed that using less energy is a good way to cut monthly spending, only half reduced their energy usage.
55% of LMI customers know about rebates and incentives, but haven’t used them.
Uplight Customer Research 2021
And many LMI customers don’t even consider that their utility can offer bill assistance despite most utilities having these programs. Uplight found that 31% of customers surveyed said they did not think their utility would help them pay their bill if needed.
Bundled offers can help utilities better serve LMI customers
Bundled offers enable energy providers to take the guesswork out of utility program participation and eligibility. By combining relevant bill, payment, rate, energy efficiency, and other programs, LMI customers can easily find and enroll in programs that will help them save money and better manage their energy bills–in one step.
Benefits to utilities and customers
Providing personalized bundled offers can strengthen the utility-customer relationship as well as reduce cost to serve and the number of accounts in arrears.
LMI customers are more apt to call the contact center if they have an issue, which is an expensive channel for utilities to maintain. With bundled digital offers, customers can self-serve via the digital app or website before they have a billing or payment problem.
Also, the National Consumer Law Center (NCLC) found that customers who have a cooperative relationship with their utility are likely to make bill payments they can afford, rather than stop payments altogether. The NCLC states: “Moreover, a positive relationship allows the utility to ensure that the customer receives fuel assistance benefits, low-income discount rates, and energy efficiency services to which the customer is entitled.”
Personalized bundled offers are a powerful tool to reach the often underserved LMI customer segment. With these, LMI customers can reduce financial stress, receive more predictable and affordable bills, and enjoy a more comfortable home. More energy savings and a transition to clean energy will also contribute to ambitious decarbonization goals–creating a more sustainable future for all customers.