Contributed by Parks Associates
For years, Americans have enjoyed access to reliable and inexpensive energy. Reducing consumption is the goal of environmentally conscious individuals, but not all consumers have made it a priority or know what to do to save energy. Natural disasters are impacting the electrical grids resulting in power outages, infrastructure damage, increased demand for energy, fuel supply disruptions, and environmental damage. Consumers struggle with power outages caused by these disasters.
Higher energy costs are impacting consumer sentiment, even among higher-income households. Meanwhile, energy prices globally continue to rise as part of a difficult macroeconomic climate that includes supply chain issues, inflation, and war in Eastern Europe.
Parks Associates latest research shows 70% of US internet households report spending $100 or more per month on their electricity and 62% think the electricity costs are too high, an increase of eight points since the end of 2021. Bills are particularly high for larger families, raising concerns even further regarding energy costs and availability. As economic uncertainty persists, consumers will continue to be cost-sensitive.
In addition to cost, supply is a concern. Energy is limited, and a growing population that is increasingly reliant on energy threatens the ability of an aging grid to keep up. One notable trend is the rise of plug-in electric vehicles (EV). While only 5% of internet households own an EV today, 20% say they intend to buy one in the next year. Major changes are occurring in the energy space as supply and distribution race to keep up with growing demand and consumers grapple with higher costs.
New government investments in energy
Recent legislation in the U.S. has paid particular attention to addressing growing energy concerns. Two major pieces of legislation, the Inflation Reduction Act (IRA) and Bipartisan Infrastructure Law (BIL), have extensive segments in them regarding solar and renewable energy.
Inflation Reduction Act (IRA) – A landmark bill with $500 billion in new spending and tax breaks to boost clean energy and reduce inflation.
- The federal tax credit for solar panels is set at 30% through 2032.
- Other technologies that can claim the investment tax credit include carbon capture and storage (CCS), nuclear power, biofuel, and clean hydrogen.
- Through December 31, 2025, the IRA will extend the Investment Tax Credit for solar, wind, biogas, geothermal, and combined heat, power and microgrid projects.
Bipartisan Infrastructure Law (BIL) – A wide-ranging piece of legislation aimed at revitalizing existing grid infrastructure and developing new technology to meet climate and US energy needs moving forward.
- The Department of Energy announced that $26 million would be allocated to developing new projects that are geared towards bolstering the grid with a mix of different clean energy sources.
- The law provides a total of $1.5 billion over the next five years to promote “environmental justice” and revitalization initiatives.
Connected devices help reduce energy consumption
Home automation has experienced slow but steady growth and innovation over decades, and the smart home ecosystem has expanded as new types of devices are introduced to provide comfort, convenience, and peace of mind. The role of smart energy solutions has gained significance as consumers place more value on energy efficiency and savings.
The following devices/solutions deliver information to their corresponding apps and platforms so users can better understand and control their energy consumption and lower electricity bills. These smart home devices can be attached to home security systems to provide more robust control and a comfortable experience, as well as safety and security features.
Smart Light Bulbs
A smart light bulb is a wirelessly connected, energy-efficient LED light bulb that can be remotely controlled, scheduled, or triggered by other smart devices. Some smart lightbulbs are dimmable, and some can shift colors among shades of white or the whole color spectrum.
Smart Thermostats
Smart thermostats perform all the tasks that traditional and non-connected programmable thermostats perform, but users can also control them remotely and the devices can utilize the cloud to facilitate sophisticated home automation. Some advanced smart thermostats gather and analyze a variety of data from HVAC runtime, home environment, owner location, weather, utility company plans, and other sources to efficiently automate home energy consumption and comfort.
HVAC remains the largest electrical load in most households, so it remains the logical target for impacting the electricity bill. Smart thermostats are also crucial to protecting grid stability by granting utility control during spikes in demand.
Smart Lighting Devices
Smart lighting devices belong in the family of smart home energy devices including smart light bulbs, smart in-wall switches, and smart plugs/adapter modules that give users wireless control. While lighting is not among the biggest electrical loads in the home, control, and management of lighting is part of an energy-efficient home.
Smart In-Wall Switches
A smart in-wall switch replaces a traditional in-wall light switch with one that is connected to the internet wirelessly and can be remotely controlled, scheduled, or triggered by other devices.
Smart Plugs/Adapter Modules
A smart plug is a portable device that plugs into a wall outlet and wirelessly connects to the internet. A smart plug can be used to remotely control or schedule any appliance, lamp, or electronic device that is plugged into it. Some smart plugs can measure energy usage and detect appliance faults or fire risks.
Smart Blinds/Shades
Smart window shades are part of the future of home privacy, security, and energy conservation. Opening and closing shades has implications beyond privacy; blinds and shades can be utilized as energy efficiency tools.
There are a variety of smart window shades available on the market ranging from devices that attach to existing “dumb” shades, to premium window treatments with luxurious fabrics that are custom-sized to the buyer’s windows. Smarter automated window shades with sensors can detect presence, leverage onboard sensors or connected smart devices like thermostats to collect temperature and weather data, and open or close blinds based on schedules, geofencing, presence sensing, and scenes.
Energy Monitoring Devices
Smart panels and circuit breakers are now available for consumers to purchase from companies like Schneider Electric, Leviton, and SPAN. These devices enable users to view real-time performance of individual electrical circuits in the home, monitor/calculate energy consumption and costs, and receive remote alerts while out of the house. Many of these device offerings also have integrations with EV chargers, adding another layer of connection between home, power, and vehicle(s).
The home energy industry is at the beginning of a major shift, with implications for a variety of industries. As energy prices rise, consumers are looking to save money but encountering multiple challenges. Technology such are smart thermostats, smart plugs, and smart energy monitoring devices can help, but familiarity is low, and adoption progresses slowly.
This is an excerpt. Reach the full white paper “Energy, Security, Automation: Converging into Peace of Mind,” written in partnership with Alarm.com.
Parks Associates will be addressing the impact of connected devices in the home and the future partnerships between utilities and smart home solution providers at its 15th annual Smart Energy Summit co-located at DISTRIBUTECH. www.smartenergysmt.com
