Can Custom Electronics Guys Play in the Smart Grid Space?

March 14, 2013
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Is there a utility play for custom electronics integrators to install home networking and energy efficiency technologies in the millions of home serviced by a smart grid? The possibilities have been discussed for years, without much of anything happening. And yet, at least a couple of well-regarded electronics industry pros believe there could be a way.

GE’s Net Zero concept from a few years ago looks prescient today.

Conventional wisdom maintains that small custom electronics integrators can’t possibly service most utilities. When utilities roll out energy-saving smart grid services en masse, possibly including home networking, they’ll need hundreds of thousands of truck rolls and the ability to carry the liability insurance.

Some experts today point to big service providers such as ADT, Comcast, Verizon, Vivint, Alarm.com,  AT&T et al to provide home area networking to support utility smart grid services. Utilizing the Internet and the millions of two-way communicating smart meters being rolled out, utilities will deliver variable, Time of Use pricing structures and load-shedding demand response programs.

Time of Use pricing signals will enable appropriately equipped energy-intensive appliances, air conditioners, water heaters and newer devices like electric vehicle (EV) chargers to run automatically at times when electricity will be cheaper. Smart appliances like dishwashers and clothes washers could be programmed only to cycle during those lower-cost times, unless a manual override is activiated.

With demand response services, electric companies can turn down air conditioners or other systems of participating customers. Oklahoma Gas & Electric runs a model demand response program that many of its customers have taken to.

Okay, so what does this have to do with custom electronics installation companies that typically install audio/video systems, home control and home automation systems in higher-end homes?

A lot, says Michael Stein, formerly of Russound and now vice president of product development with Arkados Group, which provides software for smart grid and smart home applications using wireless and powerline communication (PLC)-based products through protocols like HomePlug AV and the lower-bit rate Green Phy. (Green Phy is being touted as an EV charging and MDU smart grid delivery solution.) Arkados recently partnered with Taiwan-based Tatung to enable smart home and energy efficiency devices intended for Home Area Network (HAN) applications.

“We’ll have a hundred million smart meters in homes in the coming years,” Stein says. “If custom electronics dealers aren’t getting opportunities through that, they aren’t trying hard enough.”

Smart Grid Opportunity

Utility smart grid services such as demand response and Time of Use pricing could require networking and other devices in the home, from connected thermostats that regulate heating and cooling (especially air conditioning), to bridge devices and gateways that sort and translate the signals from the utility to the energy-consuming products. And that’s if utilities want to venture past the meter and into the home, which is way outside of their traditional comfort zone

Smart Grid

A very simplified view of how the smart grid works (above), and home benefits.

Networking products could be bought by homeowners at local big box stores, but if these devices communicate with smart meters they have to be commissioned by the utility. Stein says the OpenADR (Open Automated Demand Response) standard, used to convey demand response signals to automated systems over the Internet, opens up more possibilities for home networking. Pacific Gas & Electric (PG&E), San Diego Gas & Electric (SDG&E) and Southern California Edison (SCE) have announced support of OpenADR 2.0. OpenADR will find most of its use in the commercial and industrial sectors, but it can be used for residential.

And let’s face it: many consumers, especially high-end consumers, do not want to do their own home networking. Enter ADT, Comcast, Verizon …?

Or for the bigger homes, the trusty custom electronics guy. Eventually, says Stein, utilities will want to identify larger homes that use a lot of energy, for their load-shedding demand response programs. And if there are a lot of larger homes in an affluent enclave, all the better. Will ADT, Comcast, et al service these homes?

They could, but Stein thinks those homeowners won’t want anyone but their trusty electronics guy setting up an energy-saving, money-saving network that interfaces with utility pricing and demand response signals. Those homes, too, are prime candidates for tiered-pricing structures, which some utilities already implement to charge by your total usage, turning a $0.14 per kilowatt hour rate into $0.40 per kWh or more and running up huge bills in a hurry.

“Utilities will ultimately come to the conclusion that they will want to do DR in those customers’ homes,” Stein says.

The Los Alamos Smart Grid project's Smart House will test solar storage and smart home products from Kyovera, NEC, Sharp and Toshiba.

The Los Alamos Smart Grid project’s Smart House will test solar storage and smart home products from Kyovera, NEC, Sharp and Toshiba.

 

Can utilities parse out high-end, high-energy homes? “It’s not hard for a utility to find a house with lots of energy use or big pot farm in the basement,” says Stein. Furthermore, utilities could use big data analytics from companies such as FirstFuel and others to pinpoint high-energy users and identify how they can shed loads in those homes

With OpenADR, Stein says, the plan just needs electronics dealers who can market in those areas.

Solar Storage Utility Play

Some high-end homeowners have shown interest in energy storage systems that use batteries to store electricity produced by solar panels, wind turbines or generators. Joe Piccirilli, a former exec with electronics distributor AVAD and now managing director of RoseWater Energy Group, is putting the finishing touches on a Residential Energy Storage Hub that can store 10 to 12 kWh of power. And these systems aren’t intended solely for emergency backup.

RoseWater Energy's 10kw Residential Energy Storage Hub contains 24 lead-carbon batteries, two DC-to-DC converters for energy stabilization and an Energy Router to supply connected circuits. It is also capable of load shedding with smart grid demand response programs,

RoseWater Energy’s 10kw Residential Energy Storage Hub contains 24 lead-carbon batteries, two DC-to-DC converters for energy stabilization and an Energy Router to supply connected circuits. It is also capable of load shedding with smart grid demand response programs,

The RoseWater system could produce power via its solar array and charge the batteries during the day, then service demand response programs by utilizing the battery energy in the late afternoons and early evenings during peak load periods.

Piccirilli’s thinking is that utilities should be very interested in initiating demand response programs with homes that have their own energy storage systems. Jon Stovall of green tech distributor Energy Squad reminds us that utilities are showing an interest in energy storage systems, whether at home or community-wide levels.

“I now believe that within two decades a residential storage device will be as common in the house as a dishwasher is today,” Piccirilli says. “The difference between energy use with peak load periods, between day and night, will grow greater. It just makes so much sense.”

Of course, higher-end homeowners won’t have to wait a decade or more for their own energy storage. They can buy systems like the $45,000 Residential Energy Storage Hub—or lower-priced systems. (RoseWater is planning a smaller unit.) Remember that many technologies start out in the high end, like $15,000 flat-panel plasma screens. Energy storage systems could be the same.

Piccirilli thinks EV changing, in particular, can’t be done effectively without energy storage. As more people purchase electric vehicles and use electricity to charge them, it will tax the grid and local transformers. Utilities want smart charging of these vehicles overnight to even out the demand. But such systems will work a lot better if a home has energy storage separate from the car battery. And many consumers are expressing an interest in PV to EV systems. See where all of this is going?

Plan for It Now

Will utilities want to pick out the small slice of energy-intensive high-end homes serviced by custom electronics companies? That remains to be seen, and it’s likely too early to tell, as most utilities are still in pilot programs and uncertain as to how they’ll proceed with their smart grid rollouts. I’ll be keeping an eye on this possibility in the utility space.

In the meantime, if you’re a custom electronics guy and want a piece of the smart grid business, it makes a lot of sense to contact your local utility, find out who is in charge of the residential smart grid program, and begin a dialogue. It could be well worth the effort.

Also check out a discussion on this topic at Linkedin’s CEDIA group.

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