Are consumers ready for the smart grid?

Smart meters and in-home energy displays are trickling out into people's homes. But there's still some question whether the technology is consumer-friendly enough.

Martin LaMonica Former Staff writer, CNET News
Martin LaMonica is a senior writer covering green tech and cutting-edge technologies. He joined CNET in 2002 to cover enterprise IT and Web development and was previously executive editor of IT publication InfoWorld.
Martin LaMonica
5 min read

NISKAYUNA, N.Y.--Modernizing the electricity grid to be a more efficient and reliable smart grid will bring a number of societal benefits. That is, if consumers are up for it.

General Electric on Tuesday hosted a symposium of utility industry executives at its research lab here, where the company showed off appliances due next year that communicate with smart meters to take advantage of cheaper electricity rates.

GE also showed off the Home Energy Manager, a device that gives consumers more details on energy consumption and a way to program their appliance preferences. For example, a person can allow the clothes dryer to go into "conservation" mode when the utility signals through the smart meter that peak prices are in effect.

Photos: GE's smart-grid kitchen of the future (photos)

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These sorts of goods promise to help consumers cut their utility bills without much added expense--GE forecasts its "demand response" appliances will cost about $10 more.

But industry executives still wonder whether consumers will be drawn to products like energy displays and networked appliances. And tepid acceptance of smart-grid technologies could cut short the benefits of higher grid efficiency, they said.

"There's a lot of good technology that fits into the smart-grid concept, but the challenge frankly moving forward is getting consumer acceptance, not just today but in the future," said Bryan Olnick, senior director of the Meter Service department at Florida Power & Light. The city of Miami is hoping to land government stimulus money to install smart meters through its entire city.

Olnick said giving consumers more detailed information on their usage, such as which appliances consume the most energy, is useful for consumers because it helps them find ways to conserve. But more smart-grid applications are needed to keep consumers interested and engaged over time, he said.

Peak shaving
In addition to saving an individual home's energy consumption, smart-grid technologies are supposed to deliver benefits to the grid at large. For example, better controls over the flow of energy means that more wind and solar power can be used.

Utilities and regulators are particularly keen on shaving their "peak load," which typically corresponds to the morning hours and the late afternoon to early evening. To supply electricity during high-demand periods, utilities turn to "peaker plants," which are expensive and polluting.

In New York, for example, thousands of megawatts of power generation are used only 10 percent of the time to deliver sufficient electricity during times of very high demand, such as the middle of a hot summer day when the air conditioning load shoots up.

Kevin Nolan, vice president of technology for GE's Consumer & Industrial unit, shows off GE's demand response appliances and Home Energy Manager at GE's smart grid symposium at its Global Research Center in upstate New York. GE

For that reason, many smart-grid technologies, including GE's home appliances, are aimed at ratcheting down the load during peak times. A drier could get a "price signal" about peak rates via the smart meter and shift to conservation mode. The clothes will take longer to dry, but the consumer would get a discounted rate for easing the load on that grid.

But in practice, most utilities only offer a flat rate, not time-of-use pricing. And consumers will need to learn to navigate a variable pricing schedule to get any savings.

In its smart meter program announced Tuesday, Baltimore Gas & Electric, proposes giving consumers a rebate when they dial down energy use during peak times, rather than time-of-use rates.

Also, feedback systems and in-home energy displays can be daunting to many consumers. Baltimore plans on equipping homes with a small orb that turns from green to red to signal peak times.

At smart-grid conferences, there are often representatives from the AARP who voice concern over whether the elderly will be comfortable with the new technology, noted Juan de Bedout, technology leader for power conversion systems at GE research center.

"There's a big challenge in the human factors, making sure that interfacing with people works," he said. "It has to be simple."

Consumer control
Some people have also voiced concerns over privacy with smart meters and control in demand-response programs.

GE said its smart appliances can automatically shift to low-consumption mode based on a price signal from a utility. In other cases, the utility could dial down a thermostat or pool pump directly, something that some people view as intrusive.

The way to address those concerns is to ensure that data sharing and demand-response programs are voluntary, said Bob Gilligan, vice president of transmission and distribution at GE. Even though GM appliances will have a module built in to communicate with a smarter meter, consumers don't need to establish that connection, according to GE.

Images: The many faces of the smart grid

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Most people will want to take a "set it and forget it" approach to home energy management, where they set up appliances according to few parameters, Gilligan said. For example, a homeowner can allow a utility to adjust the temperature on the hot water heater when nobody is home and allow the thermostat to go up 4 degrees during peak times when people are home.

In terms of data privacy, Gilligan said at this point consumers elect to send detailed usage data to the utility, but the rules on data collection aren't fully fleshed out. "There are concerns that still need to be addressed in terms of the regulatory structure," he said.

On Tuesday, GE released results of a survey done by Ipsos that found three out of five consumers in the U.K. and U.S. are interested in the pricing structure behind electricity bills. Half of the respondents in the U.S. and over one-third in the U.K. said they would be willing to pay a higher monthly rate if they were able to cut overall energy costs by 15 percent.

During a panel on Tuesday, Stan Blazewicz, the vice president of technology at utility National Grid, joked that he was surprised three out of five survey respondents claimed to know what the smart grid was. That said, it is clear that a significant number of consumers are concerned over the environment, primarily climate change.

"Consumers want to do something about the environment. They want to do the right thing, but they say they just don't know what that is," he said. "And they are looking for ways to save money."