Green-Power Sales to Commercial Customers Are Growing

Green-Power Sales to Commercial Customers Are Growing

Commercial and industrial customers account for up to 38% of green-power sales, and more energy companies are offering green-energy programs to fulfill this need, according to a new report published by Chartwell, Inc.

The report, “Selling Green Power to Non-Residential Customers,” is a survey of the product and service offerings of 50 U.S. energy companies. According to the report, the number of energy companies offering green power to commerical and industrial customers is up 8% from 2001. Of those surveyed, 36% are offering green power to C&I customers. Another 16% are in the planning stages of a C&I green-power program, and 14% are considering implementing one.

“We had heard a lot in the media about green-energy services for residential customers. But programs for non-residential customers are really growing,” said Jennifer Quay Allen, managing editor of the report. “More and more power companies are asking for green power for their commercial and industrial customers, and that will encourage other energy providers to jump on the bandwagon.”

Quay said wind, solar, and biomass power are the most popular forms of renewable energy offered by utilities. “I think wind is what’s really big right now,” she said. Municipal agencies and city governments were the biggest non-residential customers of green power, according to Quay.

Chartwell's data also reveals that municipally owned utilities are much more likely to offer green or renewable power to their C&I customers than cooperatives or investor-owned utilities. The report also argues that whether an energy company's market is deregulated or not has no bearing on the rate at which IOUs offer renewable energy.

According to the report, although the transaction cost may be higher to market green power to a large customer, it can nevertheless be more cost effective. The cost to acquire that customer, on a per kWh basis, can be much lower than for mass marketing to residential customers. In addition, large customers have secondary marketing or marquee value. The promotion or recognition of a large customer purchasing green power can raise public awareness of the option, legitimize the choice, and encourage residential and other non-residential customers to buy green power.

According to Quay, marketing strategies are of primary importance for energy companies selling green power to commercial and industrial users. The report says marketing green power to C&I customers requires a strategy that should take into account the impact of the extra cost of green power, providing ways to mitigate that increase in costs, public relations benefits, civic responsibility, impact on employee morale, first-mover advantage, the bandwagon effect, internal champions, and accreditation.

Quay also had recommendations for businesses that are considering purchasing green power. “Don’t wait for your energy provider to approach you,” she said. “Be proactive. That’s how many of these programs got started.”

The report, which is part of the Chartwell New Products and Services
Research Series, is available through Chartwell, Inc. for $250.