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Using Social Media to Disrupt the Utility Business Model

15.03.2011
Sungevity, a solar installer and leasing company operating in California, Arizona and Colorado but with nationwide ambitions, recently as its Chief Marketing officer. Crane was previously CMO at LinkedIn, the 3rd largest social network platform provider. Sungevity's intention is to promote its solar installation process through social networks. The company sees this form of communication as an effective means to convince potential customers to make the switch from fossil fuel energy to solar power. Sungevity and Crane are already building a brand around "Solar as a Social Network." Can new entrants like Sungevity use social media to disrupt the traditional utility business model by becoming Social Businesses?

IDC defines a Social Business as an organization that applies emerging technologies like Web 2.0, accompanied by organizational, cultural and process changes, to improve business performance in an increasingly connected global environment. Sounds a lot like what Sungevity is trying to achieve. But first let's take a look at what the incumbents - the traditional utility companies - are doing with social media.

Most utility companies are already dipping their toes in the social media waters. They have Facebook pages and Twitter feeds that they use for relatively mainstream public relations and customer service purposes. They provide energy efficiency tips to customers and inform the public about projects and initiatives being undertaken by the company. Nothing too daring or edgy (believe me, I subscribe to most of their Twitter feeds). One unique application of social media by utilities is the use of Twitter to update customers on outages and restoration efforts. Some utility HR departments are using Facebook and LinkedIn for recruiting and at least one utility that I'm aware of is doing an enterprise wide implementation of Yammer to support internal collaboration. There's even a Social Media for Utilities group on LinkedIn. However, as with most new technologies, utilities are not the innovators and can certainly not be considered Social Businesses.

An example of an emerging social business in the energy industry is actually an unregulated subsidiary of a traditional utility company. Bord Gais Energy is the competitive retail arm in Ireland of the Bord Gais Group. Between February 2009 and February 2010 Bord Gais Energy won over 20% of the residential electricity market in Ireland's competitive market. Social media played a large part in the success of Bord Gais Energy's marketing campaign with as many as 30% of customers switching on its web site .

Other new entrants such as , a winner of GE's Ecomagination Challenge, and startups and are hoping to use social media to help consumers save money on their electric bills and reduce their carbon footprints. If these companies can combine social media technologies with critical organizational, cultural and process changes they too can become Social Businesses and may have a chance at disrupting the traditional utility business model.

Any other thoughts on this topic out there?