The Overlooked Consumer in Smart Grid

Published: Tue 21 Apr 2015
A blog entry by Christine Hertzog

Contributed by:

Christine Hertzog
Managing Director
Smart Grid Library

Christine Hertzog's Blog

Andy Zetlan, a consulting director at SGL Partners, is the guest author of this great article about consumers and lessons that utilities can learn from product and service providers in adjacent business sectors.

As we have seen in recent reports, investment in Smart Grid technologies continues to grow world-wide, with continued advances in the deployment of smart metering and analytics delivers benefits to utilities. Utilities are seeing levels of benefit in return for these investments, in the enhancement of grid operations, more accurate billing, correcting for lost revenues, and other material issues. Engaging consumers, however, continues to take a back seat in priority in many utility projects.

According to the Smart Grid Consumer Collaborative (SGCC) where I have previously served as a Board member,

“… Surveys illustrate that there is high consumer interest in electric utility energy programs. For example, three out of five respondents stated that they would likely participate in a critical peak rebate program. Additionally, one-fourth to almost half of consumers interviewed in the survey say they would be likely to participate in three other pricing programs – time-of-use, demand response and critical peak pricing plans – that were tested in the survey.”

The SGCC goes on to say that consumers really are interested in new pricing plans and service options, and understand that the technology might lead to improved reliability, reduced environmental impact, and lower costs. Lastly, the survey indicated that consumers prefer simple solutions that leave the consumer in charge of household energy management.

Are utilities ready for this? Some have taken good steps forward, but for the most part, utilities are still catching up to other industries in understanding how to support an “Internet of Things” approach to its consumers. Instead, consumers are turning to off-the-shelf solutions and competitive solutions to start down the road to self-determination around energy, but continue to be more disconnected from their utilities except to review their consumption and review possible rate approaches off-line.

Further, the existing solutions don’t yet meet the “simple” rule, although progress is being made. Future announcements from industry leaders such as Google and Apple suggest a new focus on this, and we would hope that utilities would understand and push towards a more integrated posture to make it a solution, and not just a new consumer product. We should understand that consumers also want the positive reinforcement of their actions in supporting the objectives of their investment thinking … that of contributing towards reliability improvement, environmental mitigation, and cost reduction.

There are solutions out there, but there is also confusion. Utilities aren’t always leading here, but catching up to other vendors (think Nest and others), and service providers (think ADT and Comcast) that are already gaining traction. Where will complete solutions come from that meet the need for simple and strong feedback that consumers understand? The answers are not clear yet, but the need most certainly is.