Consumer Empowerment

Interactive energy monitoring and feedback has taken another step towards large-scale use and popularity.

The San Francisco-based company OPower recently announced that it was going public, aiming to raise more than 100 million dollars through stock offerings. In a Security and Exchange Commission filing, OPower estimated their value to be $775.8 million as of last September.  OPower is a cloud-based software firm that has already coupled with some electric utilities. The utilities provide access to customer energy use data which OPower then uses to create a visually-appealing analysis of customer usage.  They also offer encouragement and suggestions for reducing energy consumption. OPower is currently partnered with 93 utilities, offering services for 32 million homes and businesses across the world.

The OPower announcement comes not long after Google’s 3.2 billion dollar purchase of Nest Labs, a high-profile investment in smart home technologies. Current Nest Lab products include a programmable, internet-connected thermostat and smoke and carbon dioxide monitor. One of Silicon Valley’s largest technology companies viewing Nest Labs as a valuable asset coupled with positive investor reaction to the IPO of an energy use analytics company adds a great deal of legitimacy to smart meters and energy monitoring technologies. They also offer enormous potential for stimulating demand-side energy management efforts.

Demand-side energy management efforts have been viewed as a strong potential solution to energy and environmental problems related to the consumption of electricity. A report by Brandon Davito, Humayun Tai, and Robert Uhlaner titled “The smart grid and the promise of demand-side management” discusses how demand-side management has two key impact areas: load shifting and load reduction. The former involves prompting consumers and businesses to shift their energy demand so that there is less demand at peak hours. This allows energy utilities to better manage their service and presents the opportunity to avoid bringing dirtier and more-expensive power plants on-line to handle demand.

Load reduction is a means of overall conservation, reducing a consumer’s demand for electricity that, in turn, would mitigate some of the negative environmental impacts associated with electricity consumption. Studies such as the one conducted by the University of Oxford’s Environmental Change Institute indicate that direct feedback on one’s energy use results in electricity savings of 5 to 15%. Direct feedback is when electric consumption and performance is immediately displayed on a smart meter display or digital application. OPower and Nest Labs are systems that engage in providing feedback to users regarding their electricity consumption, motivating long-term decreases in unnecessary electricity use. The provision of this information can do a great deal to reduce negative environmental effects of consistently high electricity use.

However, many people are still cautious about the prospect of the services and products offered by companies such as OPower and Nest Labs. Nest Labs recently had to suspend the sale of its smoke and carbon monoxide detector after OPower discovered that a feature that allows the user to disable an alarm could be accidentally activated during a real emergency. Additionally, a report by Loughran and Kulick contends that the effect on electricity sales from demand-side management strategies has been overstated.

One concern that has the potential to have a large impact on whether smart meters and energy monitoring technologies are successful is privacy. Data on when users turn their lights on and off, when they watch television, when they wake up in the morning, and other energy-consuming actions can be collected and potentially abused. The Electronic Frontier Foundation noted, “It’s not hard to imagine a divorce lawyer subpoenaing this information, an insurance company interpreting the data in a way that allows it to penalize customers, or criminals intercepting the information to plan a burglary.” Privacy concerns are one major area where users will need to be reassured before these technologies are fully accepted.

Increasing publicity and popularity for products and services such as OPower and Nest thermostats have created momentum behind technology enabling demand-side electricity management. In terms of environmental impacts and energy efficiency, providing information to stimulate demand side management offers significant advantages over our existing system.  However, it is also clear that these technologies are still developing, and concerns regarding their true effectiveness and consumer privacy must be addressed. Many signs point to smart meters and energy monitoring seeing an expansion in popularity and acceptance, but it is still too early to determine whether these technologies are here to stay.


Image Credit: Grantsewell via Wikimedia Commons.


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