Leveraging the IoT to Improve Customer-Facing Programs that Align with Grid Needs

By David Meisegeier, VP & Senior Technical Director, ICF

David Meisegeier, VP & Senior Technical Director, ICF

Utilities face an increasingly complex challenge of engaging and improving customer relationships while at the same time building a smarter, bi-directional grid. One that improves reliability and keeps costs under control. However, with the emergence of new technologies, today’s consumers have more choices – and more power. And they are increasingly investing in energy options outside of their utility, including in solar energy, energy-efficient products and services, energy storage and self-generation, electric vehicles and smart home devices – most of which are linked to the Internet of Things (IoT). Together, these emerging technologies and choices reduce customer reliance on their utility. They can also result in two-way power flows on a grid that was built for one-way flows – which is problematic for grid operators and can create power quality and reliability issues for customers as well.

This rise in distributed energy resources has driven the creation of grid edge platforms – a new breed of software that helps utilities manage behind-the-meter assets. Grid edge platforms can provide utilities with better real-time management of individual customer loads that impact the overall performance of the grid. These new platforms are focused on energy and demand impacts at the grid level, providing both temporal and locational visibility and control.

"The predictive insights from this would allow utilities to alert their customers of a pending failure before it happens and to offer to send out a repair person"

Grid edge platforms, however, do not provide much insight into the individual energy consumption behaviors of customers. Alternatively, smart home platforms can provide these insights. Their adoption among customers is growing exponentially, especially around far field voice control delivered by Amazon Echo, Google Home and Apple HomePod.

This disconnect between grid edge and smart home platforms, in my opinion, is epitomized by the loads they tend to manage and the logic used to control them. Grid edge platforms tend to focus on larger loads in customers’ homes, such as HVAC and storage, and their primary goal is to control these assets for the benefit of the grid. For example, a grid edge platform would cycle an air conditioner based on grid needs, such as shifting or reducing load at a particular time to better manage peak demand. Smart home platforms, on the other hand, tend to focus on smaller loads in customers’ homes, like lighting and plug loads – and HVAC – but their primary goal is to control the home in the way that customers want, without regard to the grid. For example, a smart home platform could turn off the air conditioner if the front door were left open for more than five minutes.

While utilities are more focused on exploring grid edge rather than smart home platforms, smart home providers are aggressively pursuing customers. They realize that whichever entity provides the smart home platform will likely own that customer down the road.

What if there was a way to leverage customer insights and behaviors with the operational realities of grid management to benefit both customers and the utility? Utilities can do this by marrying the strengths of grid edge platforms with the functionality and automation that customers want from smart home platforms. Let me explain.

Smart home platforms can provide utilities with enormous insights into their customers and their customers’ homes. These insights can help utilities drive a more cohesive and personalized experience with their customers. For example, by leveraging thermostat and weather data, utilities can identify which homes would benefit from an air sealing and insulation program. This not only allows utilities to more effectively target and market specific and relevant programs to their customers, but it can also help strengthen their demand-side management potential studies on the front end, and provide more robust measurement and verification on the back end.

Smart home platforms can also help facilitate Next Best Offers, where utilities can mine smart home data to determine the next best action they should be promoting to their customers. For example, some companies are monitoring the performance of connected equipment and appliances. The predictive insights from this would allow utilities to alert their customers of a pending failure before it happens and to offer to send out a repair person. This can provide new revenue streams for those utilities who are allowed to do so and it can also help capture greater savings for utility energy efficiency programs by validating early replacement scenarios.

The data from smart home platforms can also help grid edge platforms better manage loads for the grid’s benefit. For example, instead of turning off everyone’s air conditioner, smart home platforms can help utilities first target homes where we know no one is home. Smart home platforms can also help grid edge platforms with load shaping – by more intelligently cycling loads across homes so that grid benefits can be realized, where they are needed, without customers knowing that anything is happening.

Once combined, these platforms could enable utilities to offer customers “Smart Home Rates” – similar to Time of Use rates, but where the home is automatically responding to real time pricing signals. Similarly, it can also help facilitate the deployment of Virtual Power Plants.

In order to maintain customers’ trust, utilities will need to be clear about what they intend to collect and its use. They will also need to safeguard the information collected and give customers the option to restrict data use.

Ultimately, bringing smart home and grid edge platforms together can help utilities better align planning and offerings with customer preferences and grid realities. The end result can improve customer satisfaction while more effectively managing the grid.

David Meisegeier is a Vice President and Senior Technical Director at ICF with more than 25 years of experience in energy efficiency, distributed energy resources and customer engagement.