Electrification: solutions in dire need of a whole product experience (Part 3: creating a whole product experience)

A three-part article.

Part 3: creating a whole product experience

Creating a whole product experience

All is not lost. With evs Tesla clearly demonstrates what works and has built a company from scratch that’s value exceeds that of other car giants in the process. Heat pumps have been common in Scandinavian countries for many years, work well and in far harsher climates than we have in the UK. Here, in both cases, we are witnessing teething problem: a factor of the fragmentation you get in a new market.  At some point, groups of companies will band together to consolidate the market and aim for first mover advantage and the benefits that this brings.

Integration is the key, bringing together all the parts under one umbrella - one value chain. This, along with economies of scale that come from concentrating solutions, will bring down costs, increase confidence and create the customer experience needed to bring others into the market.  The question is, what is the catalyst that will start this process happening sooner rather than later?

This is what Traxis Energy is focused on: accelerating the mass market by providing whole product solutions in the realm of local distributed energy. We are starting with new and refurbished homes. The plan is to provide developers and subsequent occupiers with a complete turn-key energy solution that integrates technology with service, support and upkeep, similar in some ways to how hybrid cars are provided today. Purchasers will be asked to lease the energy system, again with parallels to leasing a car, something consumers are increasingly comfortable with. The upfront cost is lower, maintenance and support is included, consumers benefit and overall it is very much more convenient.

The result is property developers have a specialist company they can sub-contract their energy issues to and nor do they have to buy the equipment making their homes less expensive to build. The government and private investors can invest in an asset management business providing a far more effective means of incentivising domestic energy improvements than the current system of grants and subsidies.

Finally, energy prices should be significantly lower due to the ability to combine energy efficiency with flexibility and electricity supply through operating what is in effect a publicly owned microgrid. This has all the benefits of generating, storing and using electricity locally whilst using the grid as a back-up. It will also help minimise the peak loads that electrification will bring reducing the cost of grid strengthening and the consequent hike in network charges that are a significant part of consumer bills.

Nor are they expected to be a heating engineer and energy specialist in their own homes…

All too good to be true? Where is the catch?

Well, the catch is in getting multiple organisations to co-operate. It seems so much easier to invest in a few big things such as small nuclear, green hydrogen, wind and solar farms than to support local businesses and appeal to multiple consumers.

But things are changing.

Energy security and decarbonisation have a major local dimension to them. The longer this is ignored, the longer solutions will take and the more expensive they will be. Solutions are out there: those who collaborate, shake off inertia and are first to create whole product solutions will benefit most.

Traxis Energy is aiming to show the way - to the benefit of everyone.

Author: Simon Anderson