SAN JOSE, Calif. The Obama Administration needs to create new regulations, incentives and education programs to spark consumer use of smart grid technologies, according to a letter to the U.S. President from nearly 50 companies and organizations.
In late October, the U.S. Department of Energy awarded $3.4 billion in grants for smart grid projects. The money was part of a $30 billion package on energy measures included in the economic stimulus package announced in February 2009.
The government spending was aimed at kick starting the long-discussed move to a digital, networked electric grid in the U.S. Many believe one of the next big steps is creating a market in which consumers and businesses can monitor and manage energy use based on flexible pricing from utilities, so-called demand-response applications.
In the highly regulated utility market, such a shift will only come through new regulations, according to many observers. But the U.S. electric sector is regulated by hundreds of small public utility commissions, a fragmented set of bureaucracies the industry wants government to override.
"We need clear rules on consumer access to information; incentives to promote the deployment of technologies, including cost recovery; programs that educate and engage both providers and energy users; and encouragement of diverse technologies," the letter to Obama said.
The letter was signed by a broad group of semiconductor, systems and services companies—and a handful of venture capitalists--that see new opportunities in the smart grid. They included AT&T, Best Buy, Comcast, Foundation Capital, GE, Google, HP, Intel, Itron, Johnson Controls, Khosla Ventures, Kleiner Perkins Caufield & Byers, Nokia, Verizon and Whirlpool.
The group called for "a White House summit to address how to empower consumers with better information and tools for managing their energy use."
It also asked the Obama Administration to direct the Department of Energy, the Environmental Protection Agency and the Federal Energy Regulatory Commission to make providing energy information to consumers "a criterion for consideration in rulemakings, grants, and other programs."
In addition, the group asked the Administration to provide incentives for purchasing smart grid systems and services "as part of any program aimed at improving home and building energy performance."
The group claimed if all U.S. households saved 15 percent on their energy use by 2020, greenhouse gas savings would be equivalent to taking 35 million cars off the road and would save consumers $46 billion on their energy bills, or $360 per customer each year.
A group formed in March,
including some of the same companies who sent the letter, aimed at doing consumer research and education on smart grid use. The National Institute of Standards and Technology launched its own effort to gather consumer feedback via a blog launched in February.
Others expressed skepticism about whether demand-response applications are viable.
If consumers only shave four percent off their electric bills using smart grid services as some studies suggest "an appliance using a $10 sensor would need to use $250 worth of electricity before it breaks even on cost savings," said a comment on one EE Times forum. "For many appliances that's several years, if not a lifetime.
"Add to that privacy considerations, and you have to wonder if this is worth it at the consumer level," the commenter wrote.
Complicating the issue, there are no clear standards yet for which home network technologies would be cheap or pervasive enough to carry electric data to appliances like washers and refrigerators.