At ConnectivityWeek, a focus on the smart grid value proposition

By Kimberly Kupiecki, senior vice president, cleantech group leader, Edelman

At ConnectivityWeek 2011, it was clear that while the smart grid has had its ups and downs, it’s here to stay. During the Tuesday morning plenary, we focused on the value proposition of the smart grid. Osama Onodera, chief representative of New Energy and Industrial Technology Development Organization (NEDO), said that people in Japan affected by the Tsunami and earth quake were using their car batteries to power their phones and other devices and if the grid in Japan was just a bit smarter, many more people would have had enough power to handle the basics. Vimal Mahendru President of Lagrand Group in India shared a compelling look at the incredible opportunity to build out a new power grid in India largely based on smart grid and clean technologies. He said if you were not looking at India as a place to do business, you’re missing the boat.

Slide from Vimal Mahendru’s presentation highlighting planned new generation for India (in blue)

We also examined the need for the smart grid industry to do a better job presenting a compelling value proposition to consumers, who play a major part in the success of the smart grid but who to date have been largely left out of the conversation. There is no shortage of surveys indicating that consumers aren’t very aware of the smart grid. Just this week, Ecoalign released a study showing that just 35 percent of respondents were aware of the term “smart grid” up just slightly from last year. This, along with a number of cases of consumer backlash to smart meters over the past year, indicates that we are currently in a trust deficit when it comes to consumers and the smart grid. When you are in a trust deficit, life is hard. According to the  2011 Edelman Trust Barometer®, if a company is distrusted, people are much more likely to believe negative information about it compared to a trusted company by a margin of 45 percent. Trust is essentially a license to operate in a new reality where nothing works in isolation, conversations can start anywhere by anyone, authority is dispersed and consumers act more like citizens.

So how do we build trust? 

That was the topic of my talk on Tuesday in this case focused on the home energy management system (HEMS) market.  They key is engagement.  Consumers want more engagement when it comes to the smart grid. Many studies highlight this such as the State of the Consumer report released earlier this year by the Smart Grid Consumer Collaborative. At Edelman we have identified a number of behaviors that when expressed result in increased trust and engagement. While I won’t go through these in detail here, suffice it to say that in this new world of citizen-consumers, one or two interactions per year (the average for most utilities with 70 percent of those being negative) won’t be enough to engender trust and ultimately acceptance of new smart grid technologies. For the smart grid industry to thrive, we all need to embrace complexity, listen with intelligence and participate in the conversation.

I look forward to your comments and continuing the conversation on how to build trust with consumers when it comes to the smart grid.