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Could Your Smartphone Lower Your Electricity Bill? Could Your Smartphone Lower Your Electricity Bill?

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The Next Economy | Solutions Bank

Could Your Smartphone Lower Your Electricity Bill?

Smart-grid technology aims to prevent blackouts, cut costs, and maybe even change the way you use energy.

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(AP Photo/Amy Sancetta)

In the summer of 2011, Texas experienced a heat wave that had electricity providers sweating. So many homes were cranking the air conditioning that utility companies feared the power grid couldn’t handle the strain. One Austin neighborhood stood out. During triple-digit afternoons, homes in the area with south-facing solar panels drew half the energy they needed from their own rooftops.

That kind of detailed information can be invaluable to utility providers and policymakers who have to worry about the consequences of brownouts or more sustained losses of power. Few research organizations track energy usage as minutely—and across such a range of traditional structures and more modern green construction—as Pecan Street Inc. Headquartered at the University of Texas at Austin, the nonprofit is generating information that could change the way utility companies think about pricing and distributing energy, and how consumers think about their energy use. Tracking how a critical mass of solar panels could affect a neighborhood’s electricity demand is only the beginning.

 

“Smart grid is almost more of a shorthand term for bringing big data to electricity,” says Brewster McCracken, president and CEO of Pecan Street. By applying information technology to the electric grid, so-called ‘smart grid’ initiatives could lower electricity prices, make the system more reliable, and unlock new opportunities for innovation. McCracken envisions a future in which customers run their appliances, and manage their home’s utilities from their smartphones.

President Obama included $3.4 billion in smart-grid investment in his 2009 stimulus package, and over the past few years utility companies have been steadily installing smart meters in people’s homes. Such meters provide customers with detailed information about their energy use—usually on an hourly basis—and help utility providers both locate and respond to outages faster.

But although smart meters have been touted as a tool for energy conservation, they don’t always change consumer behavior. Electricity in the U.S. is still such a relatively inexpensive utility that for many homeowners, it’s not worth the effort to monitor hourly use. And as most utilities don’t charge a rate that reflects the real-time price of energy, consumers have little incentive to make changes in their energy-use patterns in ways that could lower costs across the entire system.

 

Pecan Street just launched a randomized field trial to determine if there are changes that could get consumers to alter their energy habits. The trial will build on a data collection the organization has conducted since 2010, when—aided by a $10.4 million stimulus grant—it began studying how 550 Austin homes use energy at the appliance level. Pecan Street currently collects 89.5 million electricity-use and voltage readings each day.

The new field trial, which will wrap up in September 2014, tests three approaches to helping homeowners save money. One group of participants will be given information on what energy costs in real time, which they can use to guide their home energy use. A second group will have optimized thermostats that automatically adjust heating or cooling to reflect energy prices. The final group will receive a text message imploring them to reduce their energy use during hot summer months.

For utilities, the promise of smart-grid technology lies in making the entire system easier to manage. If consumer energy use responded to hourly shifts in energy prices, energy demand would peak less often and utilities wouldn’t need to invest in as much backup capacity. “If you have a flatter load period, you have much cheaper electricity,” says Anthony Paul, a fellow at Resources for the Future, a nonprofit research organization in Washington. Cheaper, more reliable electricity could in turn help foster economic growth, particularly in high-tech centers like Austin.

“The digitization and bringing of big data to the home offers the potential of the app store for the home,” McCracken says. He envisions a world of energy apps that could do everything from informing users when they need to update their insulation or helping them figure out what model of refrigerator would better suit their patterns of use. “These kinds of systems really hit their sweet spot in detecting problems that were really difficult to detect before,” says McCracken.

 

Pecan Street is launching a commercialization lab this spring that will give researchers, private companies, and utilities a place to collaborate on new products. The collaborative approach could help move new innovations forward faster.

Utility companies are watching these developments, and they don't want innovation to leave them behind. “As customers have smarter and smarter devices in their house, how should we be interfacing with that customer, and those devices?" asks David Wood, vice president of electric-service delivery at Austin Energy. "Ideally, it should be invisible to the customer. And there should be a benefit for us." 

While smart-grid technology can reduce energy use and make it easier to integrate renewable energy such as wind and solar into the grid, making our current distribution systems smarter won’t necessarily reduce carbon emissions and slow rising global temperatures. “The smart grid is only green if you make it green,” says Colin Meehan, clean-energy analyst at the Environmental Defense Fund’s Austin office. A customer can always choose to turn up the air conditioning on a hot day.

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But by helping utilities to be more responsive and flexible, smart-grid technology will improve their ability to manage electricity distribution during extreme weather—or, in other words, to cope with conditions that climate change is making more common. Rising global temperatures made the 2011 Texas heat wave and drought 20 times more likely than it would have been in the 1960s, according to the National Oceanic and Atmospheric Administration. A modern U.S. energy infrastructure will have to be prepared.

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