Energy management not waiting on smart grid

Part 2 of 2 (Read part 1 here.)

In-home energy management is a cornerstone of the smart grid movement, but it’s not necessarily reliant on having the updated grid infrastructure and demand response technology in place. There are a host of players, including telcos, IT companies, hardware- and software-makers, exploring remote energy management services on a number of interfaces spanning the mobile phone, PC, television and, eventually, the smart meter.

The utilities ultimately will be responsible for issuing the smart meters, thermostats and other equipment that enable REM, as well as incorporating them into their existing infrastructure, but telcos have an opportunity to offer products and services to that utility, said Larry Fisher, next-gen research director for ABI Research. After last week’s granting of the smart grid stimulus funds, many companies are already beginning to explore how to partner up with the utilities moving forward on projects.

“With the smart grid money beginning to flow in earnest, hardware and networking vendors will step up their marketing at the utilities,” Fisher said in an e-mail interview. “Google is a good example; the company has been working to build relationships with utilities and with independent device manufacturers based on its PowerMeter, a software tool that can show consumers their home energy consumption data in near-real time.”

Google is working with smart meter–maker Itron and energy device-maker AlertMe, to ensure its service will work with equipment utilities are actually installing on customer premises, Fisher said. Ten utilities in various stages of their smart grid rollouts are also testing the service with Google. Fellow IT heavyweight Microsoft is also trialing a service, Hohm, with utilities. The free online app focuses on personalized energy savings recommendations based on information that either the consumer or their utility provides about the home’s layout and appliance usage.

While to date, most telcos involvement in REM has been through a host of mobile apps, they are also exploring the opportunity to offer services either direct to the consumer or the utility. As triple-play providers, telcos like Verizon and AT&T have the opportunity to leverage REM through their IPTV or broadband packages. Like other interactive applications they are trialing on the TV, REM could be another service tied to their middleware. AT&T is also exploring ways to allow consumers to more easily utilize the data coming off their appliances, such as over a gateway or router in the home that could alert the mobile device if an appliance stopped functioning, said Chris Hill, vice president of mobility product management for AT&T Business Solutions.

Networking chip-maker Ember uses a mesh network to scale and machine-to-machine (M2M) communications to enable connections between devices in the home, including smart meters. CEO Bob LeFort is seeing increased interest from telcos in providing value-added energy awareness and management services on top of their existing content in the home. He expects deployments early next year.

“If you don’t have a smart meter, you can put [a collar] around the incoming electric wires and using the principals of electro-magnetism, you can calculate the electricity being used on the collar,” LeFort said. “The hub would plug into your Ethernet port and there would be a low-cost display. That’s the baseline package, and [telcos] are able to disaggregate your energy usage, so by having the energy coming into your house and using some smart logic, they can help you do things like, for instance, per rate all your energy usage. What are the biggest energy users in your home — your fridge, TV, cable set-top box. This allows you to be, one, more aware, but also more knowledgeable and have seamless control of how you use your energy.”

Despite the enthusiasm in the industry, it’s not a given that consumers are even interested in having that level of control in their home. This year’s Green Power Progress Survey found that consumers would pay only about $48 to install hardware to monitor and manage energy usage. The same respondents said on average that they would pay $13 per month for the service with 30% unwilling to pay anything and 19% indicating they’d pay more than $20.

For this reason, most REM apps are offered free to consumers today. Fisher said this could change as higher consumer fees are required to defray the costs of implementing smart meters. Once those costs are recouped, he said that utilities will be able to reduce their fees and offer consumers energy management capabilities as a value-added service, but one that likely has a monthly fee attached. Another way utilities can help consumers with the fees is in conjunction with their homeowner’s insurance, said Paul Dawes, CEO of broadband home management company iControl Networks.

“If you are paying $35 for home security, you are getting 10 or 20% off of homeowner’s insurance, which is saving you — depending on the cost — $10 to $20 a month,” Dawes said. “With energy management, you can save another $10 to $20 a month. You end up with a service that a consumer is paying for, but the net cost to them is zero or even positive.”
Right now, Dawes said that energy management is a set of features that consumers will gladly adopt, but they won’t pay for the privilege. As such, it should be part of an entire home management package, he said. For energy, specifically, what people want is to know how much they are using and how they can save energy in a format that is easy to understand and to implement. Simply pushing a button to arm a REM system is the extent of what most will want to do, he said.

LaForte echoed the need for a simple, transparent system and suggested a lighting display in which green means energy is cheap, yellow means the expense is creeping up, red means avoid use if possible and blinking red means avoid use at all costs. Consumers don’t have to adhere to the system, but at least the options are clear.

Based on the nature of the smart grid and REM, in particular, privacy concerns will continue to be a hurdle in offering these services. Fisher said written consumer buy-in will likely be required in order to enable next-generation information services based on smart grid upgrades, as well as any information-sharing with other services. There are also issues that still need to be fleshed out around flows of information: how much information a utility gives up and who owns that consumer relationship. If a mutually beneficial middle ground is reached, however, it can be a win-win scenario for all the parties involved.

“You can imagine a Comcast or Verizon going to PG&E and saying, ‘Hey we have 600,000 subscribers in your footprint that all have smart thermostats, and we can control those systems, and they are willing to sign up for an energy demand response program from you,’” Dawes said. “The utility will, in many cases, be willing to pay the broadband operator for that access. The consumers who opt in will get a lower energy bill, the utilities get to save money on energy costs from managing their load more efficiently, and the broadband operators can draw more revenue or reduce the fees they charge a subscriber because it’s being subsidized by the utility.”