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Posted by: Michael Arndt on July 17, 2009
This is a guest blog by Venessa Wong, who joined BusinessWeek’s Innovation+Design team in June.
General Electric hosted what it called a Smart Grid Symposium on July 14 to publicize plans for a “net zero energy home.” This is a smart grid project that would allow residents to generate their own electricity from, say, solar panels and sell it back to the local utility Meanwhile, they’d reduce power consumption by using “smart appliances.” Bottom line: No individual electricity costs by 2015.
At the event, at GE’s Global Research Lab in Niskayuna, N.Y., I spoke with Mark Brian, manager of home energy management at GE’s Appliance Park in Louisville, Ky., about his experience as a participant in a smart home pilot that began eight months ago. The family is saving money but the lower utility bills come from not just smarter usage, but having more-efficient appliances, as well as a cooler summer.
GE’s smart grid relies on using pricing data to alter consumer behavior. In the pilot, washers, dryers, refrigerators, electric stoves, and dishwashers connect to a smart meter that communicates with the power utility. A monitor gives residents real-time updates about power usage in the home and electricity prices, which fluctuate through the day, so they can make a choice: use the appliances now or program them to run later when prices are low.
“It was a little strange at first,” says Brian. Taking their cues from power prices, his family changed the time for activities such as cooking and doing laundry. During the winter when peak price occurred between 5 p.m. and 10 p.m. his wife, Dana, did the wash before 5 p.m., he says. The dryer, one of the most energy-intensive appliances, waited until after 10 p.m. to turn itself on.
Smart appliances also go into power-saving mode when prices are high. For instance, the dryer may switch to a low-power mode; that saves money though it lengthens the cycle time. Smart refrigerators defrost run only during off-peak periods.
Add it all up, and the Brian household reduced its bill in June by 18% or $26 compared to a year earlier when they were on a flat-rate plan. A significant portion of the savings came from using less electricity. A milder summer had to do with that, and the Brians also set the thermostat at a higher temperature. Also, their new GE appliances use less power. Smarter behavior—running that dryer at night, for instance—helped them to avoid buying electricity at peak prices and saved about $2 a month compared to a flat-rate plan, as the cheapest electricity in the tiered plan cost slightly less than the flat rate.
Brian expects the savings will be greater as electricity prices rise and technologies such as solar panels, small wind turbines, geothermal heat pumps, and batteries for energy storage are added to the smart home.
GE plans to further integrate these technologies with an interactive display called Home Energy Manager, which is still under development and may be available by 2010. In addition to providing energy pricing and usage information, the manager will monitor how much energy the home is producing and allow users to choose whether to sell it to the utility.
While more people seem to be growing environmentally conscious, the key driver for changing behavior continues to be financial. Brian hopes the increased communication between the appliances and the Home Energy Manager will make saving more convenient.
“You don’t want to turn off the hot water heater every time the electricity goes up,” he says. “The system should take care of it.”
What comes next? The BusinessWeek Innovation and Design team of Michael Arndt and Helen Walters chronicle new tools for creativity and collaboration, innovation case studies in both the corporate and social sectors, and the new ideas that have the power to change the way things have always been done.