July 24, 2019 •Joe Plummer
Rural and small-town America has a proud and independent culture all its own. It also has unique energy needs and challenges.
If we use the US Department of Agriculture definition of a rural or ‘non-metropolitan’ community as one with fewer than 50,000 inhabitants, then small towns and rural countryside make up 72 percent of the land area in the United States—but just 14 percent of the total population. Yet interestingly, rural communities account for 20 percent of US energy consumption.
Patterns of energy use, fuel mix and infrastructure are often different in rural areas compared to urban districts—and on average, rural communities experience higher poverty rates. What’s more, rural homes in every US region have a higher median energy burden than in the surrounding region (meaning rural households spend a larger percentage of their income on energy bills than their urban counterparts).
So, the potential benefits of energy efficiency programs—energy savings, lower bills and improvements in comfort and health—are especially valuable to rural customers.
But the geographical, logistical and societal profile of rural America brings distinct challenges for utilities and other program implementers in delivering and scaling energy efficiency to rural customers.
One of the big difficulties is working around the lack of internet connectivity. But some implementers are overcoming these challenges and delivering targeted programs to help rural residents, businesses and farmers save energy.
What connectivity challenges do program implementers face?
The fundamental problem is surprising, but true: much of rural America doesn’t yet have reliable internet access.
According to the Federal Communications Commission, just 69 percent of rural Americans had access to both fixed terrestrial broadband and high-speed mobile services in 2018, compared to 98 percent of Americans in urban areas. Telecommunication companies have been slower to move into the rural market perhaps because of the prohibitive costs of serving such sparsely populated areas.
Consequently, this lack of internet connectivity presents huge challenges for utilities in scaling energy efficiency programs into rural areas.
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Let’s take a look at the top 3 pain points this sector faces:
- Limited access to email
It’s hard to communicate efficiently with customers through email when they don’t have reliable internet. For example, Oncor, an investor-owned utility (IOU) in Texas, found that many of its commercial customers don’t use email—which makes the effectiveness of email-based program marketing patchy at best.
- Minimal web presence and online marketing
The lack of rural broadband also means that many smaller municipal utilities and electric co-ops, which typically serve rural areas, don’t yet have a web presence or any online marketing facility—they simply haven’t needed them before now. So even as their customers are gradually getting internet access, they’re not positioned to capitalize on that connectivity.
- Little to no use of in-home smart technology
Another big downside of poor internet reliability is that internet-enabled ‘connected home’ efficiency measures (like smart thermostats) aren’t a viable option for many rural homes—nor are utility programs designed around them.
For residential and business customers, this means less control over energy usage, because they don’t have access to usage data. For utilities, it means there’s no way to collect and leverage robust efficiency data from programs—and smart grid optimization capabilities to improve grid management, reliability and security are also off the table.
How are program implementers stepping up to the challenge?
Program marketers must meet current and prospective program participants where they are—so where lack of broadband access is an issue, they’re reaching out to their people by other means.
For example, Oncor uses a multi-channel approach, engaging rural customers through traditional newsletters and mailings, by phone and via word-of-mouth program marketing strategies. They also encourage interaction through their website for those who do have internet access.
Some implementers connect with customers by delivering programs in partnership with local retailers. For instance, Efficiency Maine has a long-running retail lighting program through which it distributes instant rebate coupons and in-store signage to rural stores—customers can then pick up these coupons and present them at the checkout to receive a discount on energy-efficient LED bulbs.
Some electric co-ops are choosing to go all-in and enter the broadband market themselves in order to deliver connectivity to their members. Co-Mo Electric in Missouri, for example, has expanded high-speed internet infrastructure for its members and also offers energy management tools. As of 2016, 87 electric co-ops were offering a residential gigabit service in the rural United States, and many more are looking into the feasibility and funding of potential broadband offerings.
Summing up
It’s surprising, perhaps, that there are still wide areas of 21st century America without reliable internet connectivity, but broadband coverage is finally spreading into even the remotest areas. As more rural Americans are getting connected to the world wide web, it doesn’t just bring all the benefits of real-time energy management, enhanced online marketing and grid optimization capabilities. It also means utilities have access to granular customer energy data to help them evaluate program performance, make programs more cost-effective, deepen energy savings and overcome other challenges unique to customers in rural areas.
Unique situations require custom solutions. Schedule a meeting with Franklin Energy today to discuss serving your rural communities!
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