The markets for home insurance, holiday lets and taxis have been transformed by disruptive technologies enabling new services and new types of commercial relationships.
In 2016 we see the world’s largest accommodation provider owning no hotels, the world’s largest taxi company owning no cars and the world’s most popular media owner creating no content.
What could all this mean in the energy market?
I would like to argue that the energy sector is set to be revolutionized – just as other markets have been. And that a vital part of that transformation is the national rollout of smart meters in Britain.
Smart meters are coming to every home and microbusiness in the next five years. For the first time, there will be a digital connection between your home and your energy supplier, and smarter technology throughout our energy network. This means visibility for consumers over what we’re spending in pounds and pence.
Smart meters will be part of transforming the energy market in two major ways.
Firstly – they will increase consumer engagement.
For years this has been incredibly low – and the Competition and Market Authority’s initial findings from its investigation into the energy sector points to this lack of engagement as a major barrier to competition. To date, few people have switched suppliers and there are historical issues around trust between consumers and suppliers.
This is starting to change but opening up the market requires an even bigger shift – to give consumers the data and the tools they need to be a fully competitive force, as they have been in recent years in the car and home insurance markets. With three million smart meters already installed, we’re already seeing this access to data transforming the way people engage with energy.
Secondly, a smarter energy infrastructure for Britain will be a new digital platform for innovation in energy.
The analogue technology we currently have in our homes has been around since the 1800’s. This means our behaviour as consumers in this market is from another age. Imagine having to call your mobile phone provider to tell them how many minutes you’ve used this month.
In the future appliances will be smart – connecting to your smart meter and turning on when energy is cheapest.
It is estimated that the entire connected home market will be worth £4.5 billion to the UK economy by 2020.
This is why there is such opportunity for business.
Who consumers trust to deliver services will become as important as what they are offering. And we know that smart meters transform this trust. Only four in ten people who haven’t had their smart meter installed yet say they trust their energy supplier. For people with smart meters, this shoots up to nearly six in ten. That makes sense when you consider the transparency and visibility that smart meters bring.
So, smart meters and their data are creating the perfect conditions for the next great innovators to come up with services that could change our lives. This could be an established market player – or could be someone sat at home with a laptop and an idea.
The potential is there to be delivered.