{"id":5663,"date":"2017-05-10T10:04:31","date_gmt":"2017-05-10T15:04:31","guid":{"rendered":"https:\/\/www.openintl.com\/ambienteWordpress\/?p=5663"},"modified":"2022-09-22T14:59:44","modified_gmt":"2022-09-22T19:59:44","slug":"prepaid-energy","status":"publish","type":"post","link":"https:\/\/www.openintl.com\/ambienteTrabajo2\/prepaid-energy\/","title":{"rendered":"Prepaid Energy: A growing commercial alternative that is here to stay"},"content":{"rendered":"\t\t
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Prepaid services in the electric utility industry have experienced a boom in recent years, driven by both the evolving demands of consumers and the growing pressure on utilities to drive greater operational efficiency by simplifying processes and minimizing the financial burden of uncollectible debt. <\/em><\/p>

\"Prepaid<\/p>

Over the last two decades, prepaid products and services have been on the rise as a commercial alternative across multiple industries. This paradigm shift shows no signs of slowing down and the electric utility industry is set to be the next industry to undergo a period of great change as it embraces the benefits of the prepaid business model. As Northeast Group LLC, a smart energy infrastructure market intelligence firm based in Washington D.C, predicts: \u201cElectricity will be the next growth market for prepaid offerings, with utilities across the globe forecasted to invest $11.4 billion in prepaid metering over the next decade.\u201d Multiple industry sources, including DEFG EcoPinion consumer surveys, Navigant Research and Prepaid Energy Hub, report that prepaid energy is currently poised for strong growth.<\/p>

This global trend is driven by both consumers and utilities. For the consumer\u2019s part there has been a rising interest in energy conservation and an increase in the use of prepay options for many other services. As for the utility, there have been key technological shifts such as the rollout of advanced metering<\/a> infrastructure (AMIs) and the development of other smart grid technologies. \u00a0In addition to the rising expectations of customers, utilities face increased pressure to drive greater operational efficiency through more controlled, efficient and profitable processes that minimize any profit leaks in their operation and ensure compliance with government regulations. This mounting pressure on utilities is partly derived from the significant costs of non-operational losses (electricity theft, metering errors, invoicing inconsistencies, among other costs). These expenses are estimated to reach approximately U.S. $96 billion per year worldwide,(1)<\/a>\u00a0becoming a critical issue that undermines both the utility companies\u2019 finances as well as consumers\u2019 budgets by raising the price of the service.<\/p>

The global penetration of smart meters is expected to continue growing from an estimated 30 percent of all meters today, to approximately 54 percent by the year 2025(2)<\/a>.\u00a0 At the end of 2016, electric companies in the U.S. were estimated to have installed 70 million smart meters, covering more than 50 percent of all homes in the country. This massive rollout is expected to continue and is forecast to reach 90 million by the year 2020.(3)<\/a> Usage of smart meters for prepay energy services is expected to quadruple \u2015 from approximately 700,000 in 2016 \u2015 to over 3 million by the end of 2021.(4)<\/a> More than 200 electric utilities in the U.S. are currently offering prepaid services based on AMI infrastructure, according to the latest research from Prepaid Energy Hub. Adoption of this new alternative is most prevalent in the Southeast, and distribution cooperatives have emerged as the early adopters. Competitive retail electric providers have also adopted prepaid energy offerings, but at a more moderate pace.(5)<\/a><\/p>

For electric utility companies, prepaid electric service\u00a0 offers multiple advantages:<\/p>