Consumer sentiment is poised to be a strong driver of the domestic smart energy market, which is at a nascent stage but growing rapidly.
Europe is probably furthest ahead since it has high electricity prices, an environmentally conscious consumer base, and ambitious government targets for renewables and smart energy.
For example, the U.K. government has mandated that energy suppliers install smart meters in 26 million homes so that every household in England, Scotland, and Wales will have a smart meter by 2020. One million of these households already have rooftop solar and are well on their way to becoming “prosumers” of energy — generating, storing, and exporting energy back to the grid in an intelligent way to reduce energy bills.
In Germany, energy policies such as Energiewende and changing consumer preferences have led a fundamental shift towards distributed energy resources (often residential rooftop solar), with a target to reduce primary energy consumption by 20% by 2020 compared to 2008.
In the U.S., the 2018 Utility Energy Storage Snapshot1 indicated that residential storage projects were growing above 300% annually, albeit from a small base. U.S. consumers are motivated to adopt smart energy management in order to source energy from cleaner sources and gain control over the time-of-use or (TOU) portion of their electricity bill. Peak TOU periods are those times of day when energy prices are highest due to elevated demand.
But in many states, such as California, peak TOU fees have shifted to when solar output is weakest. As a result, the TOU portion of the electricity bill has increased by 100% in the past decade2, while the portion of the bill related to how much is used has barely changed. This severely hinders the magnitude of savings possible from smart energy management.
In the long run, however, the Asia-Pacific region is expected to be the biggest growth market for domestic smart energy3, simply because of the sheer scale of urbanization and demand for new buildings. With China boasting the highest uptake of renewables, and many other countries following its lead, consumers will be driven by the same environmental and cost control motivations as their counterparts in the West.
For consumers (and businesses) in regions prone to climatic disruption, an additional benefit of rooftop solar and storage is the security of a back-up system in the event of grid outages during a natural disaster.