Purchasing a smart thermostat isn’t enough: Three steps to build a grid-interactive home

Three key focus areas need to be prioritised to ensure the mass market adoption of grid-beneficial programmes, explains Erin Keys of Uplight.

Smart thermostats are now in nearly 20% of WiFi-enabled homes, with many of the customers who adopt them doing so with an eye on their ability to improve comfort and convenience, as well as provide modest energy savings.

These devices are just one example of a larger class of technologies called Distributed Energy Resources (DERs) that include assets like rooftop solar and behind-the-meter (BTM) storage, electric vehicles (EVs), and smart water heaters, explains Erin Keys, senior product marketing manager at Uplight.

Experts like the Brattle Group predict that DERs will increase significantly in the coming years, with smart thermostat penetration growing to 34%, and EVs growing from 3 million to 26 million by 2030. This influx of DERs presents a tremendous opportunity to establish demand-side flexibility at a scale essential to a decarbonised grid. It also creates the potential for power disturbances and reliability risks if not properly coordinated and managed with the grid in mind.

How do we capitalise on this opportunity in the next few years when historically we have not been able to mobilize customer participation in these programmes?

Presently, only around 30% of eligible customers with smart thermostats participate in load flexibility programmes like demand response (DR). Further, some studies indicate that without advanced controls that go beyond default settings, smart thermostats could negatively impact the grid. What would it take for mass market adoption of grid-beneficial programmes?

There are three key focus areas to enable this type of widespread adoption, and they are: 1) make energy engagement easy, 2) increase access to load flexibility programme incentives and enrollment opportunities, and 3) coach customers to make positive impacts on the grid.

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1.  Make energy engagement easy & delightful

When you think of delightful digital customer experiences, brands like Apple and Amazon probably come to mind far before your electric utility. Utilities are aware of this sentiment, with 74% believing that customers are turning towards other trusted brands that don’t give utilities visibility into energy consumption and ability to impact the grid.

This lack of connection back to the utility – and the grid – creates a lost opportunity for customers to contribute to power reliability. Homes with DERs only become grid-interactive when paired with a mechanism like a utility DR programme or Time-of-Use (TOU) rate that can communicate with the DER in times of grid need. As such, creating that utility touchpoint for customers is key to unlocking the value of DERs.

Utilities are actively trying to improve their online experiences to increase engagement and improve participation in grid programmes, but more needs to be done. Utility experiences will ideally mimic other digital touchpoints, like grocery orders or subscription sign-ups, with easy navigation and clearly articulated benefits. Being introduced to, and then enrolling in, a load flexibility programme must be as easy as other everyday online activities when customer attention is such a scarce resource.

2. Increase access to load flexibility programme incentives and enrollment opportunities

One such improved online experience is the utility marketplace, an e-commerce platform that enables customers to review and purchase rebated, or entirely free, household products aimed at saving energy. These marketplaces double as effective acquisition channels for utility-sponsored load flexibility programmes by giving customers the choice of pre-enrolling their DERs in DR or TOU rate offerings.

The good news is that utility marketplaces have incredibly high conversion rates, with up to 5% of customers who visit them actually making a transaction, whereas other transaction platforms for large big box stores can see conversion rates of less than 1%. Further, once a customer has an eligible item in their cart, they’ll enroll in grid programmes like demand response or TOU rates up to 65% of the time. However, the majority of customers don’t even know that utility marketplaces exist, which means that despite being a great DR acquisition channel for engaged customers, they don’t reach everyone.

For this reason, engaging utility customers in the first place is paramount, as is enabling load flexibility programme rebates and enrollments to happen in as many channels as possible in order to widen the net of potential recruitment opportunities. This includes utility channels and beyond.

3. Coach and customise to improve comfort and grid performance

Once these DERs are purchased and installed, it’s vital for their owners to receive coaching on how to best use them, especially if not enrolled in a load flexibility programme at point of sale. Integrated programmes and communications can ensure that customers are getting tailored, personalized, and actionable insights about DER management. Without guidance from their utility, many customers cannot take full advantage of their DERs’ features and benefits, potentially causing simultaneous strain on the grid from similar default settings across a large population of owners.

However, for those DERs enrolled in load flexibility programmes, orchestrating them in a way that accommodates customer preferences can also improve comfort. As a bonus, this type of orchestration can also maximize load contributions from these DERs, resulting in a win for customers as well as the grid.

Acting now to implement these types of strategies will help ensure that the availability of grid-beneficial load flexibility will grow in step with the expected proliferation of DERs. Let’s not miss a prime chance to improve grid reliability, reduce costs, and accelerate decarbonization through a thoughtful approach to load flexibility programme design and recruitment.

About the author:

Erin Keys is the senior product marketing manager at Uplight, with 12 years of experience in the power industry, including two years in a General Electric leadership development programme and four years selling demand side management programs to electric utilities across the US.