New technology and personal preferences give you more control over your electricity.
By Paul Wesslund
The thermostat on your wall marks a new era in electricity. Whether it’s a dial-style older than you or a digital model installed last month, it’s become more than just a way to set the temperature in your home.
That familiar gadget is now a gateway to a world where consumers have more say over their electric service.
You might call it designer electricity. New technology, new regulations and new ways of thinking are reshaping the utility industry. Consumers can regulate the temperature in their home more precisely. They can even generate their own electricity with rooftop solar panels and sell the excess power back to their utility.
This new world started taking shape in the 1990s, says Andrew Cotter, a program manager for the Business and Technology Strategies Group of the National Rural Electric Cooperative Association.
Cutting costs and raising reliability for sensitive electronic equipment was top of mind. Companies were willing to pay extra for electric service that wouldn’t blink off for even a fraction of a second. Other companies didn’t need such high reliability, and looked for ways to pay less in return for occasional power interruptions.
“This is a trend that’s been going on for a long time, but it’s just starting in homes,” Cotter says, noting that thermostats “can be the entry point for a lot of people to take advantage of smart-home technology and be more energy-efficient.”
A programmable thermostat can be set to avoid heating and cooling when you’re not home, or set separate temperatures for rooms you don’t use often.
That’s just the beginning of ways consumers are making more of their own energy decisions. Highly efficient LED bulbs can be controlled from your smartphone. Washers and dryers sense how much water and heat need to be used to clean and dry your clothes.
All that efficiency makes a difference. Americans’ electricity use decreased by about 2% in the past three years, according to the U.S. Department of Energy’s Energy Information Administration. That trend is expected to continue for at least the next couple of years.
It Started With Batteries
While energy efficiency saves money, the story of battery storage shows the bigger picture of how consumers are putting utility decision-making into their own hands.
The story began with homeowners using portable, motorized generators to power refrigerators and other crucial appliances during extended outages. Driven by the demand for smaller and stronger chargers for smartphones and other electronics, battery technology improved.
Battery companies thought their improved product could grab part of the portable generator market. Tesla, the high- end electric car company, soon announced a battery designed to look attractive enough to hang on your wall and provide backup power. Other companies followed.
In addition to promising relief from power outages, Tesla promoted its battery to the growing renewable energy market.
Homeowners installing solar panels on their roofs ran into a problem: They generated a lot of electricity in the middle of a sunny day, when no one was home to use it, and none at night, when they were home wanting to use electricity.
Batteries can store the sunlight.
Utilities Navigate the New World
Offering more options for consumers complicates business for electric utilities since their model didn’t plan for consumers storing electricity or selling electricity back to the utility.
“Utilities are navigating a lot of difficult decisions,” Cotter says. “They’re not selling as many kilowatt-hours. They’re selling technology that reduces sales, so they’re working to come up with a sustainable business model. There are no easy answers.”
Cotter says the member-owned, not-for-profit business structure is an advantage in a more consumer-centric industry. Co-ops are in a unique position, with long power lines that have to cover a much larger area, he says, noting that has prompted pilot programs to test utility-scale batteries.
“It might be really expensive to hook the last person up to the end of three or four miles of line,” Cotter says. “Co-ops might be in a more natural position to adopt batteries for use in those remote locations.”
A network of nearly 1,000 electric co-ops shares results from small pilot programs across the country. Co-ops are experimenting with batteries, incorporating home renewable energy projects into the electric grid and making the most effective use of energy-efficient technologies.
“Co-ops are developing a more robust understanding of how consumers want to use electricity,” Cotter says. “They are all working together so one co-op doesn’t have to do all the testing. There are no top-down solutions.”
But Where Is the Price Point?
While the march toward more choices in electric service might seem inevitable, Cotter sees it as an uphill battle because of one key question: Is it worth it?
“Do you want to spend $10,000 for a photovoltaic system on your roof and another $10,000 for a battery to avoid 45 minutes a year of power outage?” he asks.
That’s where your old-fashioned thermostat could put you on the cutting edge of the trend toward more customer choice. You can decide you like things the way they are.
“People are generally happy with their electric service,” Cotter says.
Some hobbyists might want to design ways to manage their electricity, but a lot of others don’t want to pay money for hardware only to save a few dollars a year, he notes.
In an era of more energy options, vendors will be promoting batteries, solar panels and other gizmos. Cotter advises consumers to check with their utility before making major power-use decisions.
“Talk to your co-op first because they’re the local energy expert,” he says. “Vendors have a goal of selling products. The co-op—as a not-for-profit, member-owned utility—has a different perspective that will be more in your interest.”
Saving Big? Timing Is Everything
DID YOU KNOW that when you use electricity often matters as much as how much electricity you consume?
It’s no surprise electricity use fluctuates throughout the day.
Electric utilities must be able to provide enough electricity to meet the energy demands of their consumers during times of highest energy use— “on-peak hours”—typically in the early morning, when people start their day, and evening hours, when they return home after work.
To reduce peak energy demand and save money, many electric utilities have created a time-of-use rate program to encourage electricity use during off-peak hours, when energy is less expensive to provide. Using less on-peak power means lower costs for your utility and, ultimately, lower rates for consumers.
That involves performing some of your daily chores such as running the dishwasher or doing laundry during off-peak hours; plugging electronics, TVs and power tools into a power strip and turning it off during peak hours; adjusting the settings on your programmable thermostat so your heating/cooling system syncs up with off-peak rate periods; and using automatic timers to run hot tubs, pool pumps, water heaters and other appliances.
Similar to saving money by attending a matinee, you can keep more money in your wallet simply by using electricity during an off-peak period.
The Power to Save
Consumers have more options in how they use electricity, which means big changes for electric utilities. Here are a few of the major trends and developments:
Energy Efficiency: Efficient lightbulbs and other appliances have reduced electricity sales, even as the population increases, the economy improves and we use more electronic devices.
Renewable Energy: Rooftop solar panel use is increasing enough that some utilities notice a decrease in
sales during the sunniest part of the day. Homeowners with solar panels are selling excess electricity back to the utility.
Bigger, Better Batteries: Spurred by research into stronger batteries for electric cars and smartphones, you can now buy a battery powerful and pretty enough to hang on your wall as a backup during power outages. Note: That cool gizmo can cost up to $10,000!