Indirect non-residential electric sales will exceed 50 percent for the first time in retail power market history, according to an annual study by DNV KEMA Energy & Sustainability.
The recently released Channel Partner Market study, which estimates the size of the market, assesses satisfaction with retail energy providers and identifies trends, found the share of indirect sales has grown steadily in the past five years. Channel partners are the aggregators, brokers and consultants who act as intermediaries between energy buyers and sellers.
In 2007, an estimated 43 percent of all competitively served non-residential electricity sales went through channel partners. That share grew to 49 percent by 2011, DNV KEMA said.
The study found that despite its growth, the channel partner industry is still highly fragmented and heavily populated by firms with fewer than 10 employees and less than $1 million in annual revenue, largely due to the low barrier of entry and industry immaturity. Of the 600 channel partner firms identified by the study, fewer than 10 manage more than 10 megawatt hours annually. More than 75 percent of channel partner firms have fewer than 1,000 customers and a third have fewer than 100.
Channel partners also tend to play various roles within the deregulated energy markets. Firms bring customers to retailers via prospecting, advising, organizing and ultimately, facilitating the purchase of energy. While channel partners typically serve commercial, industrial and institutional sectors, some firms also serve residential markets either as brokers or aggregators.
The study also found channel partner satisfaction with retail energy providers is lower than other business-to-business customer relationships. Some 72 percent of channel partners gave at least one retail provider an overall satisfaction score of one or two (out of five). The overall average net score for the retail industry is 15.7 percent. Retail energy providers that received the highest satisfaction scores included Mp2 Energy, Washington Gas Energy Services and First Choice Power.