Sioshansi F.P. Smart Grid: Integrating Renewable, Distributed & Efficient Energy
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Chapter 15. Customer View of Smart
Grid—Set and Forget?
Patti Harper-Slaboszewicz, Todd McGregor and Steve
Sunderhauf
Chapter Outline
Introduction 371
Emergence of Smart Grid in a World of Rapidly
Evolving Technology 372
Smart Grid Vision 377
Consumer Adoption 379
Policy Makers' Burden 382
Home Automation Rides the Smart Grid Wave 386
Conclusions 393
References 394
While some see “smart homes” as an inevitable integration of new communication technologies to the
smart grid, there is a wide gap between what consumers want and what industry experts and vendors
are expecting customers to do Convenience, ease of use, multi-functionality, and privacy will strongly
influence how and when the smart grid is invited into our living rooms and becomes part of our daily
lives This transition requires an understanding of how to turn the industry's need for consumer
engagement into reality The chapter's main conclusions are to determine practical means of engaging
customers to interact with the smart home of the future
Customer behavior, customer participation, customer response
Introduction
It may be surprising for consumers to realize that there is a
role envisioned for them in the smart grid, but it may also
surprise them to realize that their new role does not require
changing their lifestyle significantly. The goal is to enable
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their electrical devices to respond to variable energy prices or
other information, following guidelines set up by the
consumers themselves. For consumers, the first step is to
install a home automation system and gradually transition to a
smart home by investing in smart electrical devices, including
appliances, or retrofitting existing ones with add-on
functionality. Then, using a friendly user interface via their
computer, tablet, or smart phone, they can tweak preset rules
for how and when their smart appliances and devices will
respond in different situations or just stick with the preset
responses established by the manufacturers. From that point
on, consumers can go about their lives knowing that their
smart home is performing their energy management work for
them.
The smart home vision is evolving from applying new
communication technologies and protocols to energy
management. With new wireless communications, which are
covered in more detail in Chapter 16 by Hamilton et al., home
automation can be offered at a lower price point and can
include energy management as well as other features, such as
convenience, entertainment, and security.
The chapter is organized as follows: “Emergence of Smart
Grid in a World of Rapidly Evolving Technology”; “Smart
Grid Vision”; “Consumer Adoption”; “Policy Maker's
Burden”; “Home Automation Rides the Smart Grid Wave”;
and “Conclusion.”
Emergence of Smart Grid in a World of Rapidly
Evolving Technology
The early vision for the smart grid for consumers began with
the simple concept that a utility could send price signals to
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smart thermostats and to consumers. The signals to smart
thermostats would be sent using the advanced metering
infrastructure (AMI) communication network and a second
communication network commonly referred to as the home
area network (HAN). Using these two communication
networks, a utility would be able to exchange information
with smart thermostats, and the goal was to reduce energy use
for air conditioning during times of high demand for
electricity. The consumer would be notified of pricing either
on an exception basis (e.g., when prices were high) or daily
using other communication channels such as email, text, and
automated phone calls. Many industry dynamic pricing
studies have shown that including automation of demand
response for large loads, such as central air conditioning,
increases the load reduction that residential consumers are
able to achieve and makes it more convenient for consumers
[1] and [2]. This type of automation often makes use of
sophisticated algorithms to cycle the air conditioning to
achieve the load reduction while maintaining comfortable
temperatures within the home.
Over time, as utilities, policy makers, and other stakeholders
considered the appropriate role for utilities behind the meter,
more extensive scenarios began to unfold. It might be
possible using the HAN to exchange information with other
large loads, such as pool pumps, electric heaters, dryers, and
refrigerators. Images of homes with HANs with ten or more
devices began to appear on utility websites and in
presentations at conferences. New devices were developed,
such as in-home display devices, which were portable devices
that consumers could use to see energy use in near real time,
and at conferences, huge screens showed customer energy use
and cost refreshed every few seconds. Regulators and
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consumer advocates were excited by these displays because
direct feedback would be provided to consumers and in the
language that consumers understood well: money.
This more extensive vision has not been adopted quickly due
to a variety of factors, including high cost, the questionable
reliability of HAN in exchanging information with only a few
devices joined to the HAN rather than many, security, and the
need for standards. In contrast, the use of smart thermostats
has been growing along with the use of utility web portals,
but penetration of in-home display devices remains low, and
it's likely that smart phones and iPads™ will render in-home
display devices obsolete before they are offered in significant
volumes to customers.
More recently, home automation vendors have begun to
recognize that energy management functionality could easily
be included in home management systems. The advantage of
this approach is that customers could be offered applications
that coupled energy efficiency and demand response with
other consumer-oriented features, such as convenience,
entertainment, and security, thus increasing the appeal of
home automation and energy management. Control 4 and
Alert Me are examples of two home automation firms now
actively pursuing energy management as part of their
offerings.
1
1
Chapter 16 describes some of the companies and technologies.
The key to any vision of the consumer smart grid becoming a
reality is to sell consumers on the whole concept. A good way
to “close the sale” is to interest customers in the benefits of
home automation and then design systems so that energy
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efficiency and demand response help justify the cost. Home
automation vendors have recognized that the smart grid and
new technologies present an opportunity to expand the
footprint of their market. They have been active participants
in standards organizations to develop new standards to
support information exchanges between electrical devices in
homes. Demand response vendors, such as Comverge and
Tendril, meanwhile, are expanding their product lines to
extend beyond energy applications. Essentially then we're
seeing a blending of two industries: home automation and
demand response. What these companies hope to bring to
market are products that consumers value and, at the same
time, are complementary to utility demand response and
energy efficiency programs.
There is some hard work to be done to move the smart grid
into our living rooms by a number of different market
participants. Along with supporting standards, so that smart
appliances and electrical devices can exchange information
with each other and the home management system, it is
important to provide opportunities for consumers to save
money by reducing peak usage and using energy more
efficiently. At its core, it is about establishing a utility
platform that supports greater information to consumers and
greater information to the utility and enables the
establishment of pricing that more closely tracks the real cost
of electricity, as illustrated in Figure 15.1.
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Figure 15.1
Smart grid success components for consumer.
Source: CSC, April 2011
However there is a vital need to educate consumers about the
benefits of the new paradigm and the ways to take advantage
of it. If the industry gets it “right,” consumers will drive the
introduction of new products and services that continually
improve the ability to benefit and use all of the new
capabilities the smart grid will bring.
Policy makers are facing considerable pressure from those
who benefit from the status quo in the energy market and the
resulting extraordinary inertia that exists. One only has to
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watch policy makers struggle with consumer backlash to
smart metering rollouts in some areas of the United States to
see that initiating change comes with the risk that consumers
may not automatically understand what benefits smart
metering and home automation are expected to provide.
2
It is
easy to maintain the status quo, and it is incredibly difficult to
innovate within a tightly regulated industry. Anytime the
status quo is changed, some benefit while others have fears
that they will lose. Fortunately, this is not a zero-sum
game—just because some consumers gain, others don't have
to lose. To help avoid negative reactions from some
consumers, utilities and policy makers have to educate
consumers on how changes will affect them over time while
providing some immediate benefits and reducing the risks of
loss. Utilities can improve in this area and need to focus on
providing consumers with benefits as soon as practicable.
2
See the following ongoing dockets in California and Maine:
• California Proceeding A1103014 at http://docs.cpuc.ca.gov/
published/proceedings/A1103014 htm#top
• Maine: Docket 2010-345 at http://mpuc.informe.org/easyfile/
easyweb.php?func=easyweb_ query
At the time of this writing, the California Public Utilities Commission is
considering allowing consumers to even opt out of smart metering in a
rate setting proceeding. The Maine Public Utilities Commission has
already ordered Public Service Company of Maine to allow individual
customers to opt out of smart metering but did not allow communities to
opt out.
One golden application that should be offered after smart
metering is installed is “bill-to-date,” which gives consumers
a preliminary estimate of energy spending as they move
through the billing month. This incredibly obvious and
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