Case Studies in Home Energy Management
Home energy management (HEM) systems have been evolving for decades and finally appear poised to enter the mainstream. The four case studies below provide additional insight into why different utilities have taken the HEM approaches they have and how their offerings are evolving over time.
Reliant Energy is among the most prominent examples of utilities that have worked to create their own custom HEM system from the ground up. As the retail electric provider branch of NRG Energy serving the deregulated Texas market, Reliant has built up a substantial portfolio of rate structures for its customers. It was among the first to partner with smart thermostat manufacturer Nest, using the product as a perk for customers that signed up for a particular rate structure. The thermostat offering was very successful, but over time Reliant began to become concerned that they were giving up ownership of the customer relationship by relying so strongly on a third party and started looking at other options. Late in 2014, Reliant launched its own custom-built home security and automation service that highlighted the Reliant brand prominently in both the mobile app and the system as a whole. The overall intent of its offering was to start with home security and have one offering lead to the next, deeper and deeper into the home, creating strong customer relationships in the process.
Largely eschewing vendor partnerships, Reliant created its own comprehensive smart home package from scratch, going beyond a focus on energy to also include home security and monitoring services. Customers can use Reliant’s app to arm and disarm their security system, open and close their garage door, and turn their lights on and off even when they’re away from home. They can also lock or unlock their doors remotely to let family, friends, contractors, or others into their house, and keep an eye on their home with video cameras that record based on specific actions, such as when the alarm is triggered. Customers can then use the mobile app to connect to devices via the gateway, set schedules for appliances and lights using their smartphone, and control HVAC systems by setting a smart schedule for their thermostat.
California investor-owned utility (IOU) SCE is positioning itself to take advantage of the ever-evolving load-shifting capabilities offered by different HEM devices by building off of its successful smart thermostat demand response (DR) offering that leverages a variety of vendor partnerships. In its current bring-your-own-thermostat (BYOT) program, it provides a set fee per enrolled customer to different thermostat vendors, along with a rebate of $1.25 per kWh reduced to customers that participate in DR events. By putting the responsibility for marketing the program onto third-party vendors, SCE has seen a substantial increase in cost-effectiveness per kW reduced during DR events, and customers have indicated they appreciate the choice offered by the program.
To take the program to the next level, SCE created a universal contract designed to be applicable to any vendors that may want to participate in its DR offerings with the eventual goal of turning its existing BYOT program into a “bring-your-own-device” program that could encompass any smart device capable of reducing load during DR events. The contract requires participating devices to work with the OpenADR communication framework, and SCE is actively looking to expand the list of HEM vendors it partners with in the future.
Much like SCE, Illinois utility ComEd hopes to transition its smart thermostat DR program into a more expansive “bring-your-own-device” program. It currently works in partnership with Comcast Xfinity and Nest Labs to offer incentives for customers that agree to participate in DR events. Residential customers who have a Nest Learning Thermostat and enroll in Nest’s Rush Hour Rewards (Nest’s residential DR offering), or who have an Xfinity Home Thermostat and enroll in the Xfinity Home Summer Energy Management program, receive $40 in incentives from ComEd for allowing the utility to adjust temperature setpoints during DR events. Xfinity customers who enroll can also receive a free smart thermostat, making it a particularly attractive offer.
In contrast with the utility offerings discussed above, California municipal utility SMUD offers an ongoing Smart Homes new construction program that encourages builders to construct energy-efficient homes that are equipped with enabling technology for future demand-response and energy-efficiency opportunities. By incentivizing energy-efficient construction, LEDs, Wi-Fi and/or ZigBee-enabled thermostats, Energy Star-qualified appliances, good building orientation for PV panels, and plug-in capabilities for electric vehicles, SMUD’s program helps it maintain strong customer relationships while also enabling it to learn more about the pros and cons of different connected systems. Perhaps most importantly, the program is helping position SMUD to create new DR and energy-efficiency programs that will help it better integrate load impacts from solar PV systems and electric vehicles.
SMUD also has a Home of the Future Demonstration Program in partnership with local builders that is intended to result in new homes that consume at least 80 percent less energy than comparable homes and have zero peak demand. The program tests a wide range of innovative new-construction techniques and efficient technologies that, if successful, can then be shared with the local builder community and incorporated into SMUD’s other programs (including their Smart Homes offering). As part of the program, HEM systems are installed in each home that can control HVAC, lighting, office, irrigation, and home entertainment loads in order to maximize energy savings. Ultimately, SMUD hopes that the Home of the Future program will facilitate the construction of true net-zero-energy homes in their service territory that are able to produce as much electricity as they consume.
To learn more about HEM, read Snell’s full feature article “Navigating the Oncoming Storm.”
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