This article appears in the current print issue of Electric Energy, Quarterly Issue 3
There have been a number of smart home pilots in the United States that explore different technologies and use cases. A common and obvious theme among them is the impact of these devices on energy efficiency. For utilities, this is, of course, the obvious bottom line.
This benchmark has safely steered energy efficiency investments for decades and continues to be the key driver for utility smart technology programs (e.g., smart thermostats).
SmartMark Communications is working with BGE and the City of Annapolis on the Connected Home and Small Business Demonstration, which offers low income customers smart home devices to lower energy use and evaluate the benefits to quality of life.
Yet, the current Department of Energy, under the direction of the Biden Administration, has been tasked with building a roadmap for energy equity, arguably shifting the industry conversation from energy reduction to equitable access to affordable energy solutions. As utilities move steadily down the path of designing and implementing dynamic pricing and Time of Use programs, now most noticeable in the State of California, the current model is likely to benefit wealthier individuals with access to smart devices and appliances. Higher-end refrigerators and washer dryers are decked out with mobile applications and energy efficiency settings. Considered luxury items, these smart appliances are noticeably expensive. The likelihood of low-income customers selecting these things for their homes is zero. Their purchases will always be governed by cost, and that unfortunately can dictate less efficient products.
Thanks to Energy Star rebates and discounts, low-income customers have more access to energy-efficient appliances than ever before. Yet, despite that, research suggests that low-income customers are more likely to hold onto older, less efficient appliances. If you add in the economic pressures caused by the pandemic, then the likelihood of replacing appliances in the home now becomes even less probable.
That means that approaching smart and connected devices for kWh reduction is not enough, and, with the onset of time-based pricing, a perfect storm is brewing.
Energy Star appliances will not save customers significant dollars when they run during peak periods in dynamic pricing environments. Similarly, low-income customers are not likely to succeed in incentive-designed programs that encourage reduction during peak hours. That means that in the current world of energy efficiency program design, the cards are stacked against the people with the most to lose. That is a dangerous concept.
The time has come for the conversation to shift from energy efficiency to “leveling the playing field”. While smart refrigerators and washer dryers are expensive, a $10 smart plug is not. In fact, it is likely to cost less than recruitment and marketing costs for average energy efficiency programs. If utilities provided low-income customers with tools to succeed on these programs rather than just a direct mail piece, they would be creating a sustainable path for successful energy efficiency that aligned with their strategies. It is even more cost-effective economically for utilities to provide tools for success than offer bill protection in many cases.
Today’s regulators, policymakers and advocates must be aware of the role “technology access” plays in energy equity. It is the most obvious and overlooked opportunity for utilities as they seek to address issues of equality. A close friend of mine who works for a low-income advocacy group warned me that it is a myth that low-income customers do not have access to mobile phones or know how to use technology the same way as their wealthier peers. In a survey conducted by Pew Research, teenagers who came from homes, where income was less than $30,000 annually, were less likely to have access to a desktop or PC (75%) but were likely to have a smartphone (93%).
A smartphone and a smart plug are all you need to reduce energy use during peak hours if you are away from home. When you couple technology with education, there is nothing more powerful in the roadmap to energy efficiency and energy equity. It is the most obvious and most overlooked path forward for sustainable and equitable energy management in the industry.
About the Author
Juliet Shavit is the president and CEO of SmartMark Communications, LLC a global leader in strategic communications and customer experience. For more than two decades, she has been at the forefront of conversation around technology innovation and the impact of those decisions on industry transformation.
Shavit has been widely recognized for her contributions to the energy industry. She was instrumental in founding the DOE smart grid customer education working group and is the founder of the Smart Grid Customer Education Symposium.
Today, she works with utilities to optimize their AMI investments and build customer centric programs around technology adoption.