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4 Ways to Profit from the Smart Grid
Four avenues — demand response, energy management, energy storage and home area networks — to making money.
You've no doubt heard of this new smart grid we should be enjoying in the next five to 10 years. It promises to save the electric utilities money, make alternative energies like solar and wind power more widely available, and inspire us all to be more energy-conscious.
But what does it mean to you, a little ol' CE pro?
It could mean a lot. In fact, it could define much of your future business, should you choose to capitalize on the green and energy-efficiency movements.
Electric generation is the largest contributor of carbon dioxide and greenhouse gases in the world. In the United States it exceeds that of all transportation. Some 76 percent of our energy use is by buildings and homes, and our homes use more electricity than commercial buildings. Once we look beyond the gas pump and hybrid car hype, our homes become the most enticing targets for energy efficiency.
The movement toward a smart grid isn't just an environmental or political initiative. It's also being driven by compelling economic concerns. World-marketed energy consumption is projected to increase by 44 percent from 2006 to 2030. Thus, the demand for electricity will grow while electric utilities have strong incentives to refrain from building more power plants and help consumers save energy.
Cleaner power-generating technologies will help, but it could take decades for solar, geothermal and wind to overtake the amount of fossil fuels used to produce most of our electricity. In this environment of higher demand and lower (or at least more expensive) supply, electric rates will have nowhere to go but up.
The energy use of our electronic devices will also garner more attention. According to a recent McKinsey & Company report, the penetration of electronic devices and small appliances will drive their electricity consumption from 35 percent in the home today to 40 percent in 2020. By 2020, there will be 2.5 billion devices consuming power in residential homes.
A smart grid will solve some of our energy problems at the utility level. But many more of our energy efficiency challenges will have to be tackled at the end of the pipeline — in homes and commercial buildings. That means more energy-efficient products and services are needed. And smart grid initiatives will open up business opportunities for those serving that market.
How soon? About $4 billion in U.S. stimulus funding is due to be awarded for smart grid initiatives this fall, much of it in matching grants that could put up to $8 billion into the smart grid in the coming year. According to Paul Nagel, vice president of strategic development at home control manufacturer Control4, which is working on energy monitoring pilot programs with utilities, the stimulus grants will inspire more home-based energy saving pilot programs next summer, which could lead to major rollouts by 2011 and 2012. That's not a long way off.
Control4 is involved with a rollout with a small utility cooperative, Bluebonnet Electric in Texas, that will deploy the company's new EMS-100 energy monitoring system to some of its customers.
Two-way communicating smart meters are also being rolled out, with many more on the way. According to a recent Greentech Media Research report, "The top 15 North American deployments represent roughly 41.1 million smart meters scheduled … by 2015."
But what does it mean to you, a little ol' CE pro?
It could mean a lot. In fact, it could define much of your future business, should you choose to capitalize on the green and energy-efficiency movements.
Electric generation is the largest contributor of carbon dioxide and greenhouse gases in the world. In the United States it exceeds that of all transportation. Some 76 percent of our energy use is by buildings and homes, and our homes use more electricity than commercial buildings. Once we look beyond the gas pump and hybrid car hype, our homes become the most enticing targets for energy efficiency.
The movement toward a smart grid isn't just an environmental or political initiative. It's also being driven by compelling economic concerns. World-marketed energy consumption is projected to increase by 44 percent from 2006 to 2030. Thus, the demand for electricity will grow while electric utilities have strong incentives to refrain from building more power plants and help consumers save energy.
Cleaner power-generating technologies will help, but it could take decades for solar, geothermal and wind to overtake the amount of fossil fuels used to produce most of our electricity. In this environment of higher demand and lower (or at least more expensive) supply, electric rates will have nowhere to go but up.
The energy use of our electronic devices will also garner more attention. According to a recent McKinsey & Company report, the penetration of electronic devices and small appliances will drive their electricity consumption from 35 percent in the home today to 40 percent in 2020. By 2020, there will be 2.5 billion devices consuming power in residential homes.
A smart grid will solve some of our energy problems at the utility level. But many more of our energy efficiency challenges will have to be tackled at the end of the pipeline — in homes and commercial buildings. That means more energy-efficient products and services are needed. And smart grid initiatives will open up business opportunities for those serving that market.
How soon? About $4 billion in U.S. stimulus funding is due to be awarded for smart grid initiatives this fall, much of it in matching grants that could put up to $8 billion into the smart grid in the coming year. According to Paul Nagel, vice president of strategic development at home control manufacturer Control4, which is working on energy monitoring pilot programs with utilities, the stimulus grants will inspire more home-based energy saving pilot programs next summer, which could lead to major rollouts by 2011 and 2012. That's not a long way off.
It's Already Happening
Control4 is involved with a rollout with a small utility cooperative, Bluebonnet Electric in Texas, that will deploy the company's new EMS-100 energy monitoring system to some of its customers.
Two-way communicating smart meters are also being rolled out, with many more on the way. According to a recent Greentech Media Research report, "The top 15 North American deployments represent roughly 41.1 million smart meters scheduled … by 2015."
Alternative Energy: What You Need to Know
 | 4 Ways to Profit from the Smart Grid Four avenues — demand response, energy management, energy storage and home area networks — to making money. Alternative Energy: What You Need to Know Integrators create business models surrounding energy management and solar panel installations. Demand is strong, margins are OK, and competition is scarce. The Basics of Solar Installations Erdmann Electric diversified into doing solar/PV installations years ago. Here are some basics you should know. How Many LEED Points Can You Earn? Courtney Baker, manager of residential operations at the USGBC, says the number of LEED points an integrator can earn is "murky" right now. Alternative Energy: The Next Frontier Would you rather claim the title of "Mr. Energy" or cede the entire market and its incredible potential to your local utility, electrician or HVAC contractor? Erdmann Electric: Alternative Energy Supplier Ken Erdmann decided his integration company should be an alternative energy supplier. Now, as CEDIA chairman, he wants you to do it, too. Smart Grid: A Trend to Watch in 2010 Consumer Electronics Association hails smart grid's energy efficiency, other green technologies. | |
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About the Author
Steven Castle writes the green tech blog at electronichouse.com/green, and is the co-founder of Green Tech Advocates, a green technology information and marketing resource at www.green techadvocates.com.
3 Comments
Thanks for the great overview of the market opportunities!
We are developing a low cost, live, web-based power monitoring solution called Gridspy. You can see the prototype system running at
http://your.gridspy.co.nz/powertech
or read about our development at
http://blog.gridspy.co.nz/
We, like you, believe that there is huge potential in this market.
I agree, HAI has the technology in place to make all of this happen right now. It’s a shame their touchpads are so incredibly ugly. The wireless touchpad is ok, but bulky and incredibly overpriced. The 5.7 touchpad is nice and responsive, but the bezel is so ugly it’s almost impossible for me to sell. If they had an interior design type bezel, they would wipe the floor with control4. That and getting the word out about what they can do.
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No mention of HAI?
http://smartgrid.homeauto.com
HAI already has thousands of smart-grid products in the field. Easy to install, easy to use. Cost effective & powerful full suite of products.
Preliminary numbers are showing significant savings with HAI’s thermostats and Load control modules.