In January, Energy Excelerator was selected to help facilitate a new program for global electrical utilities called Free Electrons. For us and other energy enthusiasts, this is our March Madness. We help eight utilities narrow down a pool of hundreds of applicants to a Sweet 16, then finally to 12 startups that will earn a spot in the Free Electrons inaugural cohort.

A year earlier, Ramsay Siegal joined the Energy Excelerator team after having gone through three acquisitions in the solar and smart-grid industry.

“When I started my career in energy a decade ago, I expected to spend a lot of my time fighting with utilities to create the clean-energy future I dreamed of,” Siegal said. “The distance between utilities and the clean-tech community just seemed enormous and impossible to bridge. If you would have told me that in 2017 I would be working arm in arm with utilities on direct investments and massive innovation projects, I would have said you’re crazy … but due to the power of the Energy Excelerator collaboration framework, that is exactly where I find myself.”

Here are five trends we are seeing in the most progressive utilities:

1. They’re “getting outside the building.”

“At Energy Excelerator we teach Steve Blank’s customer discovery methodology, which encourages entrepreneurs to get out of the building and talk to customers. The same goes for utilities and corporates — we are seeing a significant trend where international utilities are planting a small team in Silicon Valley,” Siegal said.

In addition to directing resources toward Silicon Valley, large energy companies also have chosen to invest in Hawaii. You see this with ENGIE’s 2016 purchase of OpTerra Energy Services, which worked with Hawaii’s Department of Education to build an energy program for over 200 public schools; and Energy Excelerator’s Global Partners, which includes the likes of Hawaiian Electric, Tokyo Electric Power Co., First Philippine Holdings and Enel, which seek intel into the Hawaii market and insight into the program’s pipeline of startups.

This has two benefits: increasing deal flow through a physical presence in markets leading the way for innovation, and getting executives outside of their typical environment.

2. Create an innovation team, no matter how small.

“We are seeing an uptick in the number of utilities forming innovation teams that are reporting directly to the board,” Siegal said. “This enables faster decision-making and the ability for top brass to see trends and technologies before they are brought in by third parties. In some cases this takes the form of a venture arm making direct investments into startups. This allows them to participate in the upside of rapid change taking place in the industry, without fundamentally changing their business structure.”

3. Make investments in cultural exchange.

Siegal said, “Many utilities have expressed the challenges of cultural change. One of our leading utility partners has come up with a new strategy where they place a colleague within each of their investments for three to six months as a cultural immersion. This is a win-win because the startup gets subsidized support, and the utility rep is able to bring a new perspective back to their organization.”

4. Follow the trends in deregulated markets to avoid getting Uber’d.

“From where we sit, utilities in deregulated markets are under more pressure to retain customers and are therefore more motivated to consider new technologies,” Siegal said. “Utilities in regulated markets are closely tracking deregulated markets to see what the future might look like … and ultimately avoid getting Uber’d.”

5. The world is changing; collaborate with other utilities to get in front of it.

“Due to the constraints of delivering electrons, utilities serve a defined geographic region. This allows utilities to collaborate, evaluate new technologies together and share lessons learned in a way that large organizations in financial services or pharmaceuticals could never do,” Siegal said.

Being the first state to set a goal of 100 percent renewable energy is a feat — Hawaii’s nearly a quarter of the way there. Last month California announced it was considering a bill that would mandate 100 percent renewable energy by 2045. Pacific islands, such as Samoa, are also on their way to a clean-energy future targeting 100 percent by 2025.

Siegal ends with a thought about the future of innovation and her pick to win March Madness. On the future of innovation, she says that “generally, we find that it is more about the formation of people around new technology, rather than the technology itself.” When she’s not making bets in the office on Snap’s future stock price, she’s betting on Duke to win it all. Go, Blue Devils!

Lauren Tonokawa is head of the communications team at the Energy Excelerator. She’s a graduate of the University of Hawaii. Reach her at laurentonokawa@gmail.com.