Smart grid and smart meters are an inevitable part of America’s energy future, but at least when it comes to consumers, it has gotten off to a bumpy start.
Consumers have sued PG&E and Oncor over smart meters that they felt overcharged them (both suits were found to be without merit). Consumers in Illinois have claimed smart meters cause headaches and impotency. Recently, protesters in California’s West Marin County tried to block smart meter installers in an incident that resulted in two arrests. While there are plenty of industry watchers and executives who will say media reports of these snafus have blown the issue out of proportion, the incidents show there’s sometimes tension between consumers and utilities when it comes to the smart grid.
With all that in mind, it’s interesting to see that one pilot happening in the U.S. is coming at the game with a new approach: Focus on the making the consumer happy about the smart grid. In particular, it wants to demonstrate that the smart grid can improve the quality of consumers’ lives, much in the same way apps add value to the lives of iPhone and smart phone users.
Brewster McCracken, director of the Pecan Street Project in Austin, Tex., says its smart grid demonstration project is unlike any others in that is most concerned with the value to the customer, and not the utility. Part of the project’s goal will be to study how — and whether — the smart grid can provide value to the customer.
“The customer will have final say about whether the smart grid is a smart idea,” said McCracken in a recent statement. “The truth is that we – those working on and advocating for the smart grid – need to learn a lot more from customers than they need to learn from us. Before anyone starts prescribing solutions, we must develop a much better understanding of what customers value and how they’re using energy now.”
In smart grid rollouts so far, there’s “not much of case made for what the value to customers will be,” McCracken told me when we met at the project’s offices in Austin recently. Of course, a smart grid-enabled home could save you money on your energy bill, but he doesn’t think there’s been enough of a value proposition made yet. A smart grid-enabled home isn’t as buzzy or hotly in demand as the latest iPad.
So Pecan Street wants to focus on “the great applications that people want,” McCracken said. What’s more, the applications aren’t likely to come from the utility, but third-party providers, he argues. (“Do you get your apps from Apple or Verizon?” he asks.) McCracken sees the energy industry as comparable to the telecom industry, noting that it has transformed from a highly regulated, conservative industry into a competitive market filled with innovative, cutting-edge approaches. And in the same way that cell phone service providers offer free or discounted phones for subscribers, McCracken thinks utilities could one day offer free or discounted smart grid devices to ratepayers.
Point is, there is no killer application yet for the smart grid, a refrain I heard over and over again at the Smart Energy Summit in January in Austin. It’s true. There is no energy efficiency equivalent of Evernote or Instagram, Angry Birds or Twitter, though developers and entrepreneurs are trying to create them. And comparing the smart grid to the smartphone market makes sense for what smart grid hopefuls are trying to do.
Control4, for example, last year offered a developer’s kit so that third parties could design Flash-based apps for its home energy display. Intel’s recently debuted home energy management dashboard (pictured, above) that is sleek and colorful, with iPad-like touchscreen traits. In addition to thermostat and energy efficiency offerings, the dashboard has non-energy applications like video memos, package tracking, home security, weather and traffic monitoring tracking packages, home security, and yellow page searches.
Pecan Street’s first 100-home phase of the project went live last month, with an installed cost per home of $341. It’ll be interesting to see whether Pecan Street’s app-store approach yields creative apps for smart grid users.The project takes place in Austin’s Mueller community, is a recipient of the Department of Energy’s stimulus funding and has attracted partnerships and collaboration from local utility Austin Energy, GE Energy, Oracle, GridPoint, Cisco, Dell and IBM. It will eventually expand to include 1,000 homes.
Smart grid investment will total $200 billion worldwide by 2015, according to a forecast by Pike Research. This represents billion-dollar opportunities for startups and major companies in everything from home energy management to building controls to lighting systems to demand response. Companies like Siemens, GE, Schneider Electric, LG and Intel are expanding their business to include offerings in home energy management and electric car charging. As the smart, tech-savvy home becomes an increasingly important part of energy and technology companies’ products, Pecan Street is right on one thing: Getting homeowners to like the smart grid will be key.
[Top image via Flickr/Kevin Saff]
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