Small and medium-sized businesses (SMBs) are often considered the backbone of the American economy – yet, when it comes to energy, they can sometimes get lost in the mix between residential customers who comprise the largest number of customers and larger commercial and industrial customers that generally have dedicated account management teams.

To better understand this important, but often overlooked customer segment and help electricity providers and other industry stakeholders develop strategies that more effectively address their needs, the Smart Energy Consumer Collaborative (SECC) recently conducted the “Understanding the SMB Landscape: New Needs and Concerns” research.

Based on an online survey of 750 energy decision-makers at businesses with fewer than 500 employees, the new report explored SMB customers’ satisfaction with their providers, their participation in energy efficiency programs, frequency of reviewing energy usage data, barriers to participation in programs and offers, interest in electrification and more.

In this month’s blog, we share three key findings related to small business electrification:

1. SMBs understand that electrification can benefit them.

In general, the SMBs surveyed understood that electrifying currently non-electric operations could provide benefits to the business; in fact, only four percent said that they don’t think there are any benefits. About half of respondents (51 percent) cited cost savings as a benefit, while “improved air quality” (44 percent), “more efficient operation” (38 percent) and “uses less energy” (30 percent) were also commonly noted. However, businesses with accounts older than 10 years with their providers were slightly less receptive; 14 percent of them stated that there were no benefits to electrification, and only 39 percent cited cost savings as a benefit.

2. They are very open to switching non-electric operations to electricity.

Fifty-six percent of the SMBs surveyed said that they used something other than electricity (e.g., natural gas, propane, fuel oil) to power building operations, and among these, about three-quarters (74 percent) said that they would consider switching these operations to electricity, while five percent said they weren’t sure. For the 21 percent of respondents that would not consider switching, the top barrier cited was that it would “cost too much to change our infrastructure” (29 percent). Twenty-seven percent also cited that it would “impact our business operations negatively” and that “electricity would cost more than the existing fuel”.

3. They are interested, yet less enthusiastic about electric vehicles.

Finally, respondents were interested in switching from gas-powered vehicles to electric vehicles (EVs), but not quite to the extent as other non-electric business operations. Fifty-six percent of respondents said that they would consider switching, but 35 percent said outright that they would not consider switching (the remaining nine percent weren’t sure). Among those that said they would not consider it, electric service not being reliable enough (32 percent) and the cost of charging vehicles being too high (30 percent) were the most-cited barriers. The return-on-investment being too long and concerns about vehicle range were also commonly mentioned (26 percent and 24 percent, respectively).

While SMBs can be some of the most difficult customers to engage in energy conversations, there is a lot of opportunity with this customer segment for electricity providers and other stakeholders. The new research confirmed that there is considerable interest in electrification, demand response, energy efficiency and other programs, and by developing messaging, outreach and programs based on the needs and concerns of SMBs, electricity providers may find many of these businesses to be engaged partners on the road to a smarter energy future.

To learn more about the energy-related interests and concerns of America’s small and medium-sized businesses, access our latest report here.