3 steps to improving demand response participation for income

With the passage of the Bipartisan Infrastructure Law in 2021, residential weatherization and energy efficiency (EE) projects received a major funding boost. Simultaneously, the growth in smart meters and devices such as smart thermostats allows utilities to expand load flexibility efforts like demand response (DR) programs. Along with EE improvements, DR is crucial for building a reliable, resilient grid.

When it comes to engaging income qualified (IQ) customers in energy-saving programs, weatherization and EE improvements are generally the focus. While weatherization and EE are important to reducing energy costs and making people's homes more comfortable, DR can further enhance these benefits for IQ customers. And involving IQ customers in DR programs can help utilities make the grid work better for everyone, particularly those most impacted by energy inequity.

Clean, affordable and reliable energy is necessary for all communities. Weatherization, more energy-efficient buildings and DR programs all help make that a reality. DR in particular can reduce the occurrence of power outages and improve grid resiliency, which is vital for historically marginalized communities who face greater exposure to extreme weather events — and have less resilience against power outages.

Increasing participation in DR programs among IQ customers (those earning equal to or below 200% of the federal poverty level) is an all-around winning strategy for utilities and their customers — utilities get more load flexibility and IQ customers reap the benefits of more resilient and affordable power supplies. Nationwide, 67% of low-income households face persistently high energy burdens, meaning they spend a greater portion of their income on energy bills than the average household. This points to ample opportunity to expand energy savings programs to be more inclusive of LMI customers.

One solution is smart thermostats, which can help customers save up to 26% annually on their energy bills, and can be provided at little or no cost for IQ customers. ecobee, a leading smart thermostat provider, has distributed thousands of thermostats to income-qualified customers in partnership with utilities across the U.S. However, increasing participation in DR programs can help IQ customers save even more. "The next phase in meeting energy equity needs for IQ households is reducing barriers to DR participation. Involvement in these programs would allow these households access to smart home technology that can increase savings and support a more reliable grid," says Lisa Scott, Manager, Customer Success for ecobee Energy. "For utilities, these programs can be implemented in a cost-effective manner and help provide further reliability and flexibility within the grid."

When conducting outreach to IQ customers about these programs, utilities must account for important social and economic factors — and understand that this outreach isn't a one-size-fits-all approach. They can start with the following steps:

Only about 50% of IQ customers have internet access at home, so digital marketing efforts such as emails and digital ads may not be the most effective way to reach them. Instead, utilities should partner with community organizations and stakeholders who are trusted by members of their community.

"You need to work with IQ customers in person or over the phone; you need to attend community events to build trust," says Scott, who has over 15 years of industry experience in efficiency and sustainability efforts. The U.S. Environmental Protection Agency points to the example of DTE Energy in Michigan, which partnered with more than 30 agencies and organizations to successfully expand its Energy Efficiency Assistance Program. This included efficiency upgrades, bill payment assistance and more. Local government agencies, Habitat for Humanity and area food banks were just some of the organizations they worked with to reach low-income customers in their communities.

"Internet access makes smart thermostats smarter, but ecobee Smart Thermostats will still work without Wi-Fi. Often where there is an absence of a home Wi-Fi network, we work with installers to show customers how to connect their thermostat to their phone's data once a month to allow for updates - like an app on a phone," Scott adds.

An interesting observation is that energy regulators are often the same regulators for telecoms throughout the US. There may be merit in utility program managers and community leaders working together to identify misalignments in Wi-Fi availability and DR programs running in the area.

These lessons can be applied to installing smart thermostats for DR program participation. For populations that may not have reliable internet access, reducing the barriers and moving away from digital communication — and toward analog outreach — is key. Partnering with trusted sources in the community to share information can be a great way to reach these customers.

Utilities must engage closely with service providers handling installation for income-qualified customers. In Illinois, for example, Ameren Illinois’ Smart Savers Initiative* contracts with local HVAC and contractor small businesses, many of which are diverse, woman or veteran-owned, to install free devices in low-income residences and multifamily properties, while supporting local businesses and improving the energy efficiency of customers' homes. Ameren Illinois also partners with Peoria Production Solutions, a not-for-profit packaging provider, employing disabled and challenged local residents to package and ship DIY Smart Savers thermostats to customers across the state, making it a truly community-driven effort.

With any contractor, utilities must set expectations and guidelines to improve program accessibility. "We train installers to schedule longer times for installations in IQ homes. This allows them the opportunity to show customers every step, start to finish," Scott explains. "How to register the device, how to download the app — contractors need to take time to ensure customers can use these devices to their full energy-savings potential."

Installers must also be aware of shift work and not assume a nine-to-five schedule for all customers. "One lesson learned from our partnership with Ameren Illinois was to adjust installer timelines so they could accommodate people working night shifts," Scott explains.

Successful energy equity programs ensure that single-family homeowners, tenants in multifamily buildings and owners of multifamily properties all benefit from cost savings and grid resiliency. That requires utilities to provide accessible information to drive program participation.

For example, utilities should translate any handouts or information into languages commonly spoken in homes in a given area and consider readability. "Some customers who may take part in these programs are senior citizens, so plan for larger fonts for these groups," Scott advises. And any instructions need to be clear and concise — using "EE," "DR" and other energy-specific terminology may be confusing, so develop clear explanations. It's also important to make sure that incentives are clearly articulated and easy to redeem.

With the right communication, utilities and their partners can convey the benefits of DR programs, notably their positive effect on reducing bills and helping to prevent power outages. For IQ customers, that might include in-person visits or making customer support calls to meet customers where they are, in addition to making sure information is accessible. The end result is that program participants will know they’re contributing to their community's well-being while reducing their energy bills.

Smart thermostat owners can also have greater autonomy over their comfort and daily environment. "eco+ provides customers the ability to set their own comfort preferences and maintain control. Comfort does not need to be sacrificed for energy efficiency, even during DR events," says Scott. Greater comfort and autonomy make homes more likely to remain occupied, which benefits property owners as well as tenants.

By expanding DR programs with smart devices, utilities can address energy equity issues while increasing grid resiliency. These shared benefits for utilities and IQ customers underscore how a flexible, equitable grid benefits everyone.

Contact the ecobee Energy team to learn more about IQ program implementation solutions, training and more.

*Ameren IL currently does not operate a demand response program.