Bringing the Smart Grid to the Smart Home: It’s Not Only About the Meter
Jan 13, 2010
By Bill Ablondi
The market for residential energy management is poised to grow dramatically due to increased consumer demand and new government and industry initiatives. Frequently, and for good reason, the discussions about this emerging market focus on the expansion of Smart Grids as these solutions enable electricity distribution systems to manage alternative energy sources (e.g., solar and wind), improve reliability, facilitate faster response rates to outages, and manage peak-load demands.
The first step in implementing a Smart Grid is building an Advanced Metering Infrastructure ( AMI). A key component of AMI is the smart meter, which is a digital meter capable of processing and reporting usage data to providers and households via two-way communication with the utility offices.
Parks Associates forecasts that there will be over 40 million smart meters installed in U.S. households by 2012 (Figure 1), but installing a smart meter on a residence is only the first step. Questions remain on how best to put together all the Smart-Grid elements in a way that appeals to consumers and employs technology in the most effective manner. The first, most fundamental concern is whether or not consumers will use the smart meter once it is on the house. Smart meters with the proper user interfaces allow consumers to read and respond to real-time household power consumption, but will they be reluctant to pay for these devices? Will consumers enroll in utility programs that employ the full capabilities of these meters?
Figure 1: Households with AMI-capable Meters
Parks Associates conducted a national survey as part of its Residential Energy Management service to determine consumer mindset regarding energy management solutions:
· Over 80% of consumers are very interested in learning how to cut their energy costs, but less than one-half want to learn more about Smart Grids.
· 80-85% of households are willing to pay $80-$100 for cost-saving equipment if they are guaranteed to save 10-30% off their monthly electricity bills (Figure 2).
· Only 15-20% of consumers are likely to sign up for time-of-use or demand-response programs; 35% do not want utilities to control systems in their home regardless of the savings potential.
· Less than 5% of households have any type of electronic lighting system, but 55% are very interested in light-dimming systems that can save them money.
Figure 2: Households Willing to Pay for Energy Saving Equipment
Smart Grids can be potent tools in helping consumers reduce their energy costs, but consumers have several concerns that could inhibit adoption. In order to maximize Smart Grids, utilities and suppliers of energy management solutions must first educate consumers about the benefits of these advanced systems and then package these solutions so that capabilities and advantages are obvious to consumers and easily integrated into their lifestyles.
Smart Energy Summit
Bringing the Smart Grid to the smart home requires engaging the consumer. Accomplishing this fundamental but challenging task is the focus of Smart Energy Summit in Austin, Tex., on Jan. 25-27. Smart Energy Summit: Engaging the Consumer, hosted by Parks Associates in association with Austin Energy, is the premier conference studying the market for residential energy management and Smart Grid technologies.
The event features a unique combination of market research, featuring results from Parks Associates’ landmark Residential Energy Management service, and real-world expertise derived from Austin Energy’s Smart Grid, the largest working Smart Grid in the U.S. Visitwww.smartenergysummit2010.com for more information.
Bill Ablondi is Director of Home Systems Research for Parks Associates, a market analyst and research company.