Getting Consumers to Cross the Smart Grid Chasm

Two years ago, the Smart Grid industry was debating the pros and cons of different displays to deliver electricity prices, rates of consumption, and current bill amounts.  Unfortunately, no one really asked consumers what they preferred, but some visionary entrepreneurs began to eye their own smart phones and ask themselves if people really wanted to get yet another gadget dedicated to a special purpose (providing energy information) when there was such a versatile and available device that could provide the same information. 

Smart phones and tablets are the new Smart Grid devices to provide information at the grid edge for consumers.  Smart phones are already at 36% penetration rate in the USA according to a recent Nielsen survey, and tablets, which show a similar growth trajectory to smart phones, could even outstrip smart phones if the most optimistic projections from Morgan Stanley research come to pass.

People Power has taken this idea to the point of creating an Energy Service Platform that resides in the cloud and offers real-time and historical analytics about energy consumption of devices – posted to smart phones.  The solution incorporates behavioral science knowledge to facilitate energy awareness and decisions for inhabitants of both residential and commercial buildings.  They are thinking big – beyond the Smart Grid and into the Internet of Things, a concept that is generating significant global attention and the subject of some of my blogs.  Their open source software developers kit can accelerate device and application integrations to their platform – and create opportunities for development of creative games, peer-based coaching, and other innovative channels of building awareness and decisions about energy consumption.

So we are starting to see the pieces of the puzzle come together.  We have the devices.  We have the platforms to create appealing applications for these devices.  And as was pointed out at the recent Smart HEMS Summit where I moderated a session on consumer engagement, appliances are getting smart (meaning they are enabled with communications capabilities), and we have fairly ubiquitous WiFi in the USA to deliver communications – no smart meter required.  So what’s holding back adoption? 

Communications.  Adoption requires thoughtful, layered communications campaigns led by electric utilities, since consumers believe that utilities are a natural source of information to help them reduce their electricity and gas bills.  This is a topic that’s been covered in my ebook, “The Smart Grid Consumer Focus Strategy:  Transforming Utility Operations to Build Consumer Value.”  Utilities may find partners in retailers, as a recent initiative that involves 3 utilities – Pacific Gas and Electric, Reliant, and Constellation Energy in partnership with Best Buy – to explore the value of onsite and online Home Energy Departments that will be similar to their Geek Squad centers of specialized knowledge. 

Financial Rewards.  The crossover will also require innovative business models that deliver financial incentives to consumers to adopt these tools and embrace changes in their homes and their lifestyles.  Research conducted by GE reveals that residential consumer participation in programs such as Demand Response – which are seen to be critical to addressing peak energy consumption conditions – will be stimulated by monetary rewards.    

Time will tell if utility communications programs and these nascent consumer outreach initiatives yield success.  But we still need innovative financial models to motivate consumers to cross the Smart Grid chasm.