Today, and for the foreseeable future, the customer premise is an integral part of the electric power system. Among the emerging solutions aimed at customers and their meters, which one warrants new research and development? Which are the technologies that focus on the customers and/or on their premises?
Accelerating end-use energy efficiency, increasing consumer adoption of energy generation technologies, the emergence of intelligent energy using devices, and rapid adoption of new technologies such as all forms of distributed energy technologies, including plug-in electric vehicles (PEVs) and energy storage imply a changing business environment. This may necessitate changes in utility rate design, particularly for those customers who choose to take advantage of these new technologies. Rate design changes may also need to accommodate flat or decreasing kilowatt-hours sales.
To meet the needs of tomorrow’s retail customers served by distributors, it is critical that the industry develops an enhanced understanding of consumer behavior regarding electric technologies. Specifically, the industry needs a comprehensive and accurate evaluation of consumer perspectives toward smart grid technologies in order to further the understanding of motivators for consumer adoption.
Increasingly, behavioral economics and other social science disciplines are providing insights that can help improve the designs of interfaces between the consumer and smart grid technologies. Some of the smarter technologies, including intelligent thermostats, have already been adopted by millions of electric customers often without receiving any utility incentive. In other cases, utilities may seek to test smart grid technologies that interface with users and programs approaches aimed at consumers using valid experimental design methodologies prior to providing adoption incentives. Better understanding consumer preference will help coordinate activities ranging from designing informational materials to assisting stakeholders in relating to consumer attitudes in order to improve engagement.
This includes a desire to understand the value drivers in consumer terms and to answer questions such as, “How would a consumer experience the technology and benefits of the smart grid?” Some intelligent energy-using devices will automatically implement customer preferences after purchase of the smart device or its initial online or point-of-purchase program enrollment and require no further engagement with the customer. Other smart grid technologies may involve greater consumer engagement. In these cases, utilities must be able to go beyond acceptance and create a “pull” whereby consumers are asking to become involved in smart-grid technology.
Among the most important research which needs to be undertaken, let’s include the following:
- Motivation: What are the key drivers for adoption and ongoing appropriate use of technology which facilitates consumer connectivity to the smart grid? This research needs to recognize that consumers are motivated in a broad range of ways and to take advantage of the growing body of behavioral and social science research.
- Understanding: Understanding technology and how to relay this in consumer terms through an understanding of consumer perception, awareness and interest level. Approaches should be tested under experimentally designed pilot conditions.
- Education: Identify keys to effective education and a common industry message to enable the same story to be told, which can promote a consistent level of understanding.
- Incentives and program designs: Education alone is often insufficient to motivate consumer action. Consumers are motivated by financial and other incentive or program design aspects such as convenience, trust, competition, social norms, and so forth. Additional research is needed to refine these areas.
- Competitive market development: Given appropriate wholesale pricing and settlements, utilities and competitive retail electric suppliers may package electric supply, intelligent devices, and/or other services in a service offering that helps the customer manage their energy bill. Additional research may help utilities and regulators better understand the market structures and rules that provide economic incentives for suppliers to compete in providing energy services and improve power markets.
Inverters are microprocessor-based units used to transform dc to ac power that can be used to connect a photovoltaic (PV) system with the public grid. The inverter is the single most sophisticated electronic device used in a PV system, and after the PV module itself, represents the second highest cost. It is also considered the weakest link. Whereas, solar panels are very robust and carry 25-year warranties, inverter warranties have traditionally been in the 5-year to 10-year range. Inverter reliability, however, has been trending up.
There are many types of inverters. Some are stand-alone units isolated from the grid and used to support a stand-alone rooftop system; others are grid-tied, in which case the microprocessor circuits are more elaborate and require additional functionality, including lightning protection. Central inverters are used in large applications. They can often be connected according to "master-slave" criteria, where the succeeding inverter switches on only when enough solar radiation is available. Module inverters are used in small PV systems, such as household rooftops.
A new generation of microinverters holds promise to increase PV performance. With current PV design, all solar panels are connected in series, so that if any panel in the series is shaded, it brings down the performance of the entire system. Moreover, for a series module to work, all panels have to have the same orientation and tilt, which limits rooftop configuration. The microinverter scheme, on the other hand, allows each panel to be connected to its own microinverter, increasing overall system performance and providing flexibility for the staggered roof designs of many modern homes. Austin Energy, among others, is testing new microinverter designs.
A residential energy management system (REMS) is a system dedicated to managing energy usage within a home. There is a broad range of capabilities and architectures for REMS. The REMS can be either passive or active. A passive REMS can present a consumer’s real-time energy usage on an in-home display device. An active system dynamically makes adjustments to intelligent home devices (IHD), such as smart thermostats, water heaters, and so forth. Systems can do this based on signals received from the utility or a third party. The REMS can be connected directly to a utility’s smart meter and/or to the utility or to a third party through the internet. In addition, the system may handle customer preferences and occupancy via a schedule, on-demand, or occupancy sensing automation.
REMS are a subset of a home automation system that can handle lighting, family calendars, shopping or replenishment, and home security. Some recent examples of companies offering REMS devices include NEST thermostats, Iris systems from Lowe’s, and the Nexia systems from Trane/Ingersoll-Rand. These companies are focused on providing devices that consumers can procure off-the-shelf and install themselves. Nearly all the off-the-shelf products that are becoming available are using proprietary communication standards and protocols with a “services” business model that locks in customers to only that service provider. As of the writing of this document, preliminary information regarding consumer purchases of advanced REMS show promise with some systems in millions of homes.
Most utilities provide their customers with access to their energy consumption data through their website. Many utilities provide this data using a standardized date format called Green Button. Using Green Button allows consumers to make use of third-party apps that analyze and interpret the data in various ways. These apps can provide consumers with insight into their energy usage and promote energy efficiency. Consumers can, for example, access current energy usage statistics, historical usage patterns, and the amount of carbon dioxide emissions avoided by using a renewable energy source.
These aspects make it difficult to pin the price tag onto the REMS. Many components have a dual purpose and exist under separate financial justifications. Consumer reluctance to purchase an EMS may be driven by on-line options that could replace key parts of the functionality of an energy management system.
Providing real-time feedback on energy consumption holds significant promise to reduce electricity demand. Several studies over the past 30 years have evaluated the effectiveness of energy savings from home energy displays of varying sophistication. Most of these studies verified savings between 5% and 15% with a longer-term sustained impact toward the lower end of this scale. However, another study found that feedback information in the form of mailed monthly/bimonthly energy reports with neighbor comparisons can results in impact in the 2% range, although there is not enough strong evidence regarding impact of energy display devices.