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Commentary
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?
.

THE TUESDAY TOPIC

© 2010 SmartGridNews
We need gutsy leadership on
energy issues – and Congress
Figure 1: Households with AMI-capable Meters isn't providing it

Last week we talked about Europe having a

Parks Associates conducted a national survey as part of its Residential Energy Management higher smart grid IQ than the U.S. Utilities
service to determine consumer mindset regarding energy management solutions: over there are able to tap into a larger social
agenda. Unfortunately in the U.S., we have a
· Over 80% of consumers are very interested in learning how to cut their energy costs, leadership void in Congress when it comes to
but less than one-half want to learn more about Smart Grids. defining energy goals or forward-thinking
· 80-85% of households are willing to pay $80-$100 for cost-saving equipment if they policies. Is there a fix?
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 Click here to join this discussion
programs; 35% do not want utilities to control systems in their home regardless of the now >>
savings potential.

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· 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. Visit
www.smartenergysummit2010.com for more information.

Bill Ablondi is Director of Home Systems Research for Parks Associates, a market analyst
and research company.
.
Related SGN resources ...
Home Area Networks
Metering
.
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Talk Back to the Author Current Comments (11) Leave a Comment

Demand Side Innovations

In order to have low cost and/or high value service, in the comming future, consumers
should be allow to decide for themselves if they want to pay for resources of the
demand side, like for example an average metering infrastructure they may no need
for many years.

As can be inferred from the Electricity Without Price Controls (EWPC) article, "Forget
Demand Side management (DSM); Think Demand Side Innovation (DSI)( http://bit.ly
/8LtybG )," the power industry will get to a dead end with regulated Investor Owned
Utilities Architecture Framework incremental extension DSM products, when what is
needed is a competition on DSIs that they will only know later on, as it happen in
other industries.
José Antonio Vanderhorst-Silverio, Ph.D. - 01/13/2010 - 14:12

Hear, Hear! The utilities missed this one!

Out west, PG&E is converting many areas to smart meters, and they were surprised by
many people complaining about their bills going up. What a major faux pas in setting
the customers expectations! I believe most consumers assumed that their bill would
go down with the new meters; at the very least they had the expectation their bills
would not go up! PG&E doesn't seem to be doing anything to explain the time of use
rate features of smart meters.

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For the smart meters to be of any use to the consumer there must be some sort of
report on time of usage readily available. We got a smart meter when we had the PV
system installed. At first we received monthly printed reports from PG&E showing
power generated and used at the different rates. The reports are not as informational
these days, which is good in one way as they were many printed pages.

Smart meters are only useful for the utility unless means are made available to the
consumer to be able to adapt their usage. For now this will likely be a manual process,
but the utilities should also be helping their customers understand their options for
automatic adjustments.
Steve Buchholz - 01/13/2010 - 14:15

Home Energy Efficiency

Thank you for posting this very informative article. I would be very interested in
learning more about the survey and the report. I am with a new company called
People Power (http://www.peoplepowerco.com) that is bringing wireless, reliable
home area networking devices into existing homes (even ones without smart meters)
to enable residential energy savings. We will be at the Smart Grid summit in Austin
and look forward to further discussions on this topic.
Sunil Maulik - 01/13/2010 - 14:17

Properly framing the smart grid message is key!

For the most part, electricity is cheap. Really cheap. Consumers are hearing about the
smart grid and the deployment of smart meters without a good understanding of
what’s to come. That is, the price of electricity will eventually go up, particularly
during peak times. As long as the price of electricity remains the same, there will
likely be other “investments” that consumers can make to cut their household
expenses. When the rest of the country starts facing price increases and tiered pricing
structures as seen in California, energy efficiency will become more relevant as will
the investments that help to curb usage. See you in Austin!
Arun Mathur - 01/13/2010 - 15:59

Does measurement = energy saving?

Smart meters are a tool that have the greatest potential benefit for power utilities.
What the benefit for consumers is and whether the investment is justified remains to
be seen.

Measurement does not automatically mean that savings will be obtained. Home
owners are simply getting information about their consumption - whether this
translates into long term repeatable savings. The research suggests that there is often
an initial short term spike in energy savings, but after a 3-4 months consumer interest
drops and the in home displays end up in the kitchen drawer. I read an interesting
article which called this MTKD - mean time to kitchen drawer.

I am all for measurement - but it is really on the first step. Real energy saving benefits
are much more obtainable and sustainable through energy conservation measures,
efficient lighting, weatherisation, smart thermostats, reducing standby power, timers /
scheduling of loads etc. It appears to me that there is a disproportionate amount of
resource is being allocated to measurement where the resource could be better
allocated to energy efficiency.

Bernard Emby - 01/13/2010 - 16:21

Our utility didn't care

I grew up in rural Vermont. We had 2 water heaters on a 2nd electric meter with an
electromechanical time switch, for an off-peak rate. Cool, huh? Well, in rural Vermont,
power failures are extremely common. The meter reader never reset the time switch
to the correct time of day, and it was sealed, so we couldn't. Apparently CVPS didn't
hold that program in high esteem.

I think dynamic pricing is very reasonable, and a good way for consumers to save
money based on real costs of their consumption. (Consumer behavior will even guide
the building of new capacity.) However, I predict a tsunami backlash against dynamic
pricing, because the average American has an IQ of 100 and may not figure out how
to use the system for a long time.

What we may see is 3rd party service providers working with people for a cut of the
savings, if there's enough money to go around.

People are comparing this to the personal computer revolution, but I'd offer another
comparison. We have good standards work out of the gate this time (UtilityAMI's
OpenHAN looks like a very good piece of work for this point in history). I think there
also isn't as much money on the table. The comparison I would offer is telephone
deregulation. (I was there, creak, wheeze!) The FCC had legal power to say whether
you could use a 3rd party phone, answering machine, or modem, and it might be a
dumb design in some cases, but it generally worked and didn't cause harm. Then we
got into alternate long distance service. Then competing dialtone providers (CLECs).
Now we have IP telephony (which some might say could use more regulation).

Standards have a huge role, and regulation shouldn't be neglected. Also, people need
help. Utilities need to provide well-designed education and assistance; real stuff, not
pro forma. And as I think of it, as other people have mentioned, we need to tie the
financial success of utilities to what's best for society, which isn't selling power.

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Pete Cann - 01/14/2010 - 07:55

You Gotta Be Kidding

Under absolutely NO circumstances will I allow an AMI meter or any such garbage into
my house. I don't care what the power companies, the government, or organizations
like yours say -- there are virtually endless possibilities for abuse. As with any
electronic information, this data is only a subpoena away.

Mark me up as part of that 35%, BIG TIME. I'll gladly pay the extra cost to keep out
this intrusive big-brotherish garbage.

First comes monitoring, then comes control.

BTW, I'm not just some paranoid flunky. I'm a computer scientist, active in aerospace
for 22 years, specializing in both real-time flight control systems and large database
design. My hobby interests include radio frequency comm systems and electronics.

No way to Smart Grid, no how. Not a chance, Vance.

Mark Randall - 01/14/2010 - 16:39

Is AMI really the starting point?

The assertion in the 2nd paragraph that AMI is the first step in implementing a smart
grid deserves scrutiny. Smart Meters are certainly a key element on the Smart Grid
landscape - and they typically represent the most expensive outlay in a full smart grid
deployment. However, starting by extending information & communications
technology to higher level elements in the grid (like distribution transformers) may
yield significant savings, improve reliability, boost operational efficiency etc - and lay a
solid foundation for progressing to meter upgrades in a second phase.
Robin Eckermann - 01/14/2010 - 17:39

Smart for who?

IF the goal of the "smart grid" is to 'reduce energy' and provide cost savings to
consumers, THEN consumers unilaterally would get a one for one savings to
encourage it. Otherwise, the "New Govt and Industry Initiatives" are deceptions to set
up resource constraints to extract more money from the consumer. Your savings will
likely be off set by rising fees and service / distribution charges.

This type of construct for a common good such as energy shows the disingenuousness
of the majority of smart grid conversation.

Can anyone tell me what public utility will measure their success by the decrease in
power distributed and consumed AND reward the consumer one for one without
jacking up fees and service charges?

Just as the rate of those who do sell excess energy back to the grid get the short end
of the deal (wholesale versus retail rates) and just as the Government gets a set
share / rate of your 'gains' but limited write off of 'losses', this is a poorly designed
construct for the 'attested' goal.

Count me out - I'd prefer an off grid microgrid solution.

Mark Pugacz - 01/14/2010 - 22:06

Top Down versus Bottom Up

The smart meter is simply the next generation of utility metering technology that has
the smarts to register closer to real time the cost of power generation and delivery.
However, the rates being charged to consumers are not in real time (e.g. 1-15 min),
but rather a concoction of averages called, on-peak , off-peak etc. An out-of-dated top
down strategy whereby the industry attempts to influence consumer behaviour. Large
commercial and industrial power users have had such metering with TOU rates for
some thirty years. With few exceptions this strategy never worked. And it wont work
in the residential classification either, unless the consumer has the information tools
to make their own decisions - bottom up with real time pricing.
Douglas Tideman - 01/15/2010 - 07:20

Smart Grid, the objective and the customer

The objective of the Smart Grid should be to 'Flatten the fossil'; reduce output and
ensure the remaining plant runs most efficietly - full load. This means getting the right
price message across to the customer, remembering that we are not just shaping the
load curve but the residual demand less the output from fixed generation (Nuclear and
other inflex plant ) and after the variable output from renewables has been
subtracted.

Getting the customer involved means using 'whatif' scenarios with them to introduce
the idea of dynamic tariffs and what they might do in reponse. This will give an insight
into which tariff structure - preset time of day, single time of use or predictive time of
use would actually give the best result. Crucially for the industry it will also show how
customer reaction can be developed in a way that is 'value effective' to both customer
and the business..... Engaging the customer in this way should lead to effective design
of the Smart Framework and also engender the necessary enthusiasm!!!

More discussion at

http://stephenbrowning.110mb.com/project/

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with some pretty hard stuff re industry forecasting.

Stephen Browning - 01/18/2010 - 07:41

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