How banks can harness Open Energy Data to accelerate the home energy transition

Deliver on net zero commitments. Cut emissions from mortgage portfolios. Support your customers with the cost of living. Grow your green lending volumes. So much to do, so little time. 

The cost of energy

Whether you’re buying a new home, car or dishwasher, the cost of energy should be an important consideration. The total cost of ownership is an increasingly important factor, and it’s no longer just about the purchasing costs. Energy consumption needs to be factored in and accounted for when it comes to making investments in and for your home. However, consumers are usually left to make these major decisions using incomplete data. In practice, this means the ratings on incomprehensible energy efficiency certificates and a large amount of guesswork. Surely, there must be a better way. Right?

The empowered consumer

At Eliq, we believe that consumers need to be empowered to make these important financial decisions based on their actual energy usage. We think the world is on the cusp of an era of ‘Open Energy Data’, where customers use the array of energy data gathered by smart meters to influence their other consumer choices.  The challenge for innovative companies is to work out how to access and make sense of energy usage from the home.

Open Energy Data

To understand the concept, we must first look at the significant digital shifts in the domestic energy sector over the last two decades. The growth of smart meters in Europe means that huge amounts of data are being collected about home energy usage but, for many years, consumers were unable to gain any value from this information. This is no longer the case. Utilities are sharing insights with their customers about the financial impacts of their energy decisions. These insights are based on the aggregation of energy-related data from a host of sources, including power price and emissions data; analysing it compared to other energy users which, at Eliq, is in an anonymised database of millions of homes; and then giving tailored advice.

The ‘open’ part refers to the way companies, like retail banks, can access the system that analyses this data and provides insights for consumers. Utilities have been using this technology for years, but other companies including retail banks are now seeing the benefits too. This is made possible by the new open interfaces that allow third-party companies to access data from utility meters. Like “open banking” created a structure for banks to open their customer’s financial data, Open Energy Data is a concept and structure (albeit not on a unified European standard) that opens energy meter data to other service providers to serve customers. 

Over the next decade, we believe Open Energy Data will drive big changes in many industries – and some companies are already seeing these opportunities. Like KBC bank, but we’ll get to that later in the text!

Banks –  you’re up

Banks play a vital role in helping customers make good financial decisions, and more are providing integrations on their banking apps to help customers manage services such as Netflix or news subscriptions. It enables banks to expand on existing personal finance management (PFM) tools to provide advice and budgeting capabilities for more financially savvy decisions.

What does this have to do with energy? Well, greater transparency when it comes to spending doesn’t stop at Netflix – there are other savings to collect here. Households are spending a lot of money on energy services. Electricity doesn’t come cheap, and what if banks could provide transparency on what consumes the most energy in a home, provide suggestions for how to consume less, or even provide advice on energy-efficient renovation? Well, they can. And it goes hand in hand with the banks’ targets. Helping customers to reduce energy bills goes hand-in-hand with helping them reduce emissions. Energy use data can help banks to report better on their mortgage portfolio and be better prepared to live up to those rising ESG reporting requirements in the future. This can help consumers and thus boost customer retention but also make it easier for consumers to invest in an energy-efficient renovation to future-proof their homes.

KBC – An Example of Innovation

KBC, a leading European financial group, wanted to give their customers access to features that will help them understand and manage their energy usage easily and efficiently. The solution was “Energy Insights” available in KBC Mobile and provided in association with Eliq. Customers of KBC no longer have to wonder why they’re using more or less gas and electricity than their neighbours or during certain times, but can instead easily monitor their personal situation, and reduce the size of their energy bill. Read more about the KBC solution here.