Technology can’t get more visible and disruptive than Home Energy Management Systems (HEMS). HEMS solutions are one of the most critical components of the Smart Grid – truly game-changing solutions that change the relationship residential consumers have with electricity and with utilities.
HEMS solutions are software solutions that offer direct consumer management of electricity in ways that just cannot be accomplished now. A basic HEMS solution provides information about your current electricity consumption, some utility pricing information, and suggestions on how to reduce electricity use through a web portal. In the future, HEMS solutions will also include information about the charge in your electric vehicle (EV), the performance statistics on your rooftop solar or micro wind turbine, and forecasts of energy use based on weather.
HEMS solutions usually include some sort of In-Home Display (IHD) that communicates information that ranges from current electricity rates, home electricity consumption rates, and what I term “home operations metrics” like temperature and security status. These IHDs can be wall-mounted displays or standalone, battery-operated wireless displays, or even visual devices that simply glow a different color to indicate home consumption or real-time tariff rates.
In the current electrical grid, the utility’s relationship with a residential ratepayer ends at the meter, affixed to the outside of a home. Bills arrive after the fact – at a minimum a month after your electricity use. HEMS and IHDs completely disrupt this consumer engagement model, and offer the opportunity for utilities to extend their relationship inside the home with much richer content and real-time data. True, utilities have websites that consumers can visit, but this information is relatively static.
Smart Grid-enabled HEMS solutions can deliver information that residential users would find compelling – such as real-time billing information mentioned above, tailored suggestions about how to trim their electricity bills, offers for participation in demand response programs to reduce rates, and more. This information empowers consumers to make educated decisions in real-time about how to manage their electricity consumption. That’s the good news.
The bad news is that, operationally and culturally, utilities are not accustomed to selling to residential end users. They don’t inhabit a competitive world where they must fight for mindshare and market share. If you look at the take rate for utilities’ consumers to sign up for electronic billing as an indicator of their selling capabilities, it is abysmal. Only 17% of all residential utility customers have enrolled in electronic billing. In comparison, 40% of telecom customers have electronic billing. Clearly, there’s a problem in utility outreach and education to sell consumers on a program that has solid environmental and convenience benefits.
If utilities have low success rates in getting people to enroll in simple programs like electronic billing, then there are real challenges in communicating complex and layered messages about the benefits of HEMS solutions and associated IHDs. As I noted in last week’s blog about PG&E’s rollout of smart meters, residential end users will have the opportunity to have a very visible and very disruptive technology introduced in their homes. If it’s done well, not only do the utility rate payers benefit, but overall we all benefit from fast adoption of Smart Grid solutions. However, technology rollouts that result in confusion, opposition, and lawsuits have negative impacts on everyone.
Utilities are depending on HEMS solutions to enable widespread participation in demand response and energy reduction programs. The stakes couldn’t be higher to plan and conduct effective rollouts of these HEMS applications, starting with clear messaging about the benefits of HEMS solutions to average residential customers. Not every consumer embraces change – especially when we have all been conditioned to regard electricity as a cheap and plentiful commodity that doesn’t require much attention on our part. However, we can be educated to welcome changes such as smart meters and HEMS solutions, as some utilities have successfully demonstrated.
HEMS rollouts must clearly articulate the benefits to end users – what’s in it for them, what’s required of them, how to get more information, how to get support when things break, and examples of what the solution looks like and options for IHDs. A successful HEMS rollout requires a sophisticated sales and marketing strategy. Next week’s blog will explore some of the key tactics in a successful strategy.
Recent blogs (see archives: October 12th and 26th, November 2nd and 9th):
Flat Panel TVs Get Energy Efficiency Standards in California
Break out the Champagne for the bold decision by the California Energy Commission (CEC) in approving new energy efficiency standards for TV sets sold in California!
covered the brouhaha that the CEA and some TV manufacturers created with the usual scare tactics about job loss, economic disaster to businesses, and all the other assorted ills that have been projected with every previous CEC energy efficiency standard. Fortunately, the CEC knows from actual experience that these standards improve economic conditions – for California consumers who will enjoy reduced operating costs (i.e. electricity bills). In energy efficiency matters, other states often adopt the CEC rules, so here’s hoping that this positive trend to reduce energy consumption continues across the nation.
The Smart Grid Library blog appears weekly to deliver information and perspectives about Smart Grid solutions, companies, and industry trends that will change our relationship with electricity.
peterthomes said:
RE smart meters
As you say there is reluctance about these both from utility companies and consumers, and remembering a possible separate grid ownership or control (which also comes into the proposed US transmission grid restructuring, possibly based on the Texas Ercot system), the question is who should pay for a roll out of smart metering.
The main advantage with smart metering is in my view not if you have a light bulb on or not, but to allow direct competition between service providers, including real time switching to avail of lower rates - which can also tie in renewable energy suppliers in grids they haven't been in before, and be seen as an attraction for consumers.
Electricity Distribution and Consumer Smart Metering
Increased efficiency, Green choice, Lower prices
.
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Mon, 2009-11-23 18:20 — peter thomespeterthomes said:
Re California TV ban (as in second part of the article)
While it's great to let consumers know how to save energy,
bans are in my view wrong
1.
Where there is a problem - deal with the problem!
Energy: there is no energy shortage
(given renewable/nuclear development possibilities, with set emission limits)
and consumers - not politicians - pay for energy and how they wish to use it.
Notice: If there was an energy shortage, its price rise would limit
people using it anyway.
No need to legislate for it!
It might sound great to
"Let everyone save money by only allowing energy efficient products"
However:
Inefficient products that use more energy can have performance,
appearance and construction advantages
Examples (using cars, buildings, dishwashers, TV sets, light bulbs etc):
http://ceolas.net/#cc211x
For example, big plasma TV screens have image contrast and other
advantages along with their large image sizes.
Products using more energy usually cost less, or they'd be more energy
efficient already.
There might not be any
running cost savings either:
Depending on how much a cheaper product is used,
but also, if households use less energy (also from other household efficiency based bans),
then utility companies make less money,
and will just raise electricity prices to cover their costs.
So people don't save as much money as they thought.
Conversely,
energy efficiency in effect means cheaper energy,
so people just leave on TV sets and other appliances, knowing that energy bills are lower,
as also shown by Scottish and Cambridge research
http://ceolas.net/#cc214x
Either way, supposed energy - or money - savings aren't there.
2.
Taxation, while still wrong, is better than bans for all concerned.
This is not like a ban on dangerous lead paint!
It's simply a ban to (supposedly) reduce electricity consumption.
TV set taxation based on energy efficiency - unlike bans - gives
Governor Schwarzenegger's impoverished California Government income on
the reduced sales, while consumers keep choice.
This also applies generally,
to cars, buildings. dishwashers, light bulbs etc,
where politicians instead keep trying to define what people can or can't use.
Politicians can use the tax money raised to fund home insulation
schemes, renewable projects etc that lower energy use and emissions
more than remaining product use raises them.
Energy efficient products can have any sales taxes lowered, making
them cheaper than today.
People are not just hit by taxes, they don't have to buy the higher
taxed products - and at least they can still buy them.
----------------------
Why energy efficiency regulations are wrong,
whether you are for or against energy and emission conservation
http://ceolas.net/#cc2x
Summary
Politicians don't object to energy efficiency as it sounds too good to
be true. It is.
--The Consumer Side
Product Performance -- Construction and Appearance
Price Increase -- Lack of Actual Savings: Money, Energy or Emissions.
Choice and Quality affected
-- The Manufacturer Side
Meeting Consumer Demand -- Green Technology -- Green Marketing
--The Energy Side
Energy Supply -- Energy Security -- Cars and Oil Dependence
--The Emission Side
Buildings -- Industry -- Power Stations -- Light Bulbs and other
electrical products
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Mon, 2009-11-23 18:13 — peter thomesPost new comment