How Green Power Program participants can help accelerate the journey
Society has until 2030 to slash carbon emissions by 45% to avoid the worst effects of climate change, according to the recent UN IPCC report. Fortunately, the single largest source of emissions in the U.S., the transportation sector, may already have the answer: electric vehicles (EVs).
Yet today, more than a decade after the first contemporary battery-only EV (BEV) was delivered, less than 0.5% of the world’s 1.2 billion vehicles are EVs. And while EV sales in the U.S. are forecasted to overtake sales of gas-burning vehicles around 2035, they will represent only 42% of total vehicles on the road in 2040. To hit IPCC goals, we must accelerate EV adoption.
What’s slowing us down? One significant challenge is “the awareness gap” in knowledge of EVs on the market: in one study by Strategic Vision, for example, 54% of consumers were not able to name even one EV model. In addition to lack of awareness, there are also consumer concerns around charging and “range anxiety”.
Utilities are recognizing the business value of EVs
While most utilities recognize that they are key players in the transition to EVs and are increasingly active in supporting them, the majority are still early in the journey. According to SEPA, 74% are just getting started with simple initiatives such as providing EV information that can help close the awareness gap and purchasing EVs for their fleets. Only 23% are directly encouraging the purchase and use of EVs through tactics like deploying charging infrastructure and rate incentives, which together speak to consumers’ concerns.
A vigorous EV program can be a huge win for utilities. By accelerating the pace of EV adoption, they stand to gain financially by growing demand for energy and related services, and by improving operational flexibility as EVs become a grid resource.
Another important benefit: EVs can help utilities improve customer satisfaction by saving their customers money through reduced rates, and helping them navigate the barriers to EV purchasing.
So if utilities have ample motivation to help accelerate EV adoption, what’s their next step? At 3Degrees, we have worked closely with utilities nationwide for over a decade and had a hypothesis that they have a built-in audience for marketing EVs: participants in Green Power Programs (GPPs). These customers have already shown that they are willing to make investments to support sustainability. To test this theory, 3Degrees studied GPP participants from 10 U.S. utilities and compared them to EV owners – and proved our hypothesis.
Many similarities between EV owners and GPP participants
Our research found that GPP participants and EV owners are very similar across a number of factors.
- Higher rates of income and net worth – both groups tracked above national averages, though the net worth of EV owners averaged 133% higher than GPP participants.
- Higher levels of education – both EV owners and GPP participants have higher than average college completion rates, though a notably larger percentage of EV owners (65%) are college grads versus GPP participants (49%).
- Higher levels of home ownership, home value, and home equity
- Higher levels of environmental consciousness
- Higher propensity to spend across lifestyle categories, like gardening, healthy living, books, and luxury retail items
Based on these findings, we then looked for evidence that our hypothesis is playing out in the market and worked with one of 3Degrees’ utility partners to examine its residential GPP participants and EV owners in that service area.
The correlation held up: EV owners were 79% more likely than non-EV owners to be enrolled in that utility’s green power program.
As part of our research, we also compared the demographics of hybrid owners and GPP participants, since hybrids (like EVs) are often purchased on the basis of their lower carbon emissions. Not surprisingly, hybrid owner characteristics lined up well with GPP participants and, in some cases, even better than EV owners.
In addition to the demographic similarities, GPP participants are also strong targets for EV marketing for another important reason – the best target for any utility program is a customer who already participates in a utility program. They likely read what you send them, they’re engaged with their energy use, and they like trying new programs.
Utilities and GPP participants can be climate heroes, together
By growing their green power programs and effectively marketing EVs to those participants, utilities can play a significant role in accelerating EV adoption. In the process, both utilities and their customers have the opportunity to become true climate heroes.