Utilities Must Take Responsibility for the Smart Home

It is in the utility’s best interest to support smart home technology as it serves to benefit the sector as a whole, as well as its consumers.
Published: Thu 16 May 2013

The deployment of smart meters is a major element for the integration of energy in the smart home. The smart home promises its owner quality of life, efficiency, convenience and most of all transparency when it comes to the household utility bill. Smart meters, in conjunction with the smart home, will provide a significant amount of data on energy consumption. This data will eventually become essential as it helps utilities design more efficient energy services and the customer will have more control of his/her consumption. It is therefore in the utility companies’ best interest to help develop the smart home as overall energy efficiency will improve now that the customer is more interactive. Thanks to smart home technology and detailed utility bills, the ball is now in the customer’s court to control energy consumption in a more effective manner. It is for this reason that the utility should make a commitment towards helping develop the smart home. This support of the smart home will also give utilities the opportunity to build a trusting and more sustainable relationship with its customers. Utilities will now be able to provide transparency on energy consumption. Utility bills will be more detailed, showing customers exactly which appliances are not energy efficient. This will also, in time, make customers more aware of their consumption habits. The result will be a hugely reduced utility bill which will definitely put a smile on the customer’s face and overall grid energy efficiency will be greatly improved.

By becoming smart, the smart home will also be able to deliver energy flexibility to the power system. Energy companies are in an ideal position to provide their customers with the value created as a result of this flexibility. Flexibility becomes increasingly essential for many purposes such as the integration of local photovoltaic or wind generation, the challenges posed by peak demand, and the development of electrical vehicles.

But, it’s not as easy as it seems. Utilities are somewhat nervous about smart home technology as the devices are updated regularly. In addition, the smart home technology industry is somewhat new and many manufacturers are too small to market their products successfully.  This leaves utilities in the dark about the wide range on offer. Utilities have to be careful about who they decide to partner with, as well as their choice of technology platforms and sales channels. Utilities should avoid niche vendors and they should also insist on open standards and interoperability from various suppliers.

The utility industry has become immensely competitive. Smart home technology is not necessarily an extension of smart metering infrastructure. For this reason, it is essential that utilities become the main channel through which smart home technology is sold. If they do not do this, retailers will beat them to the market and utilities will lose ownership of their customer relationships. Instead of becoming energy services providers, utilities may become energy wholesalers.

Engerati Analysis

It is clear that utilities must make the right decisions as they alter their status from energy supplier to energy service provider.


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