Consumers and the Future of Home Energy Management

Energy providers continue to face familiar challenges and pursue long-standing objectives. These include driving consumer adoption of energy efficiency and demand response programs that minimize utility costs and promote grid stability. Grid resilience is at the forefront of utility focus. Cold weather, the dramatic weather events in Texas, wild fires, hurricanes, and non-weather-events like cyber security attacks have all exposed grid vulnerabilities.

Many are also reevaluating their strategies for distributed energy resources so they serve more to promote grid resilience versus destabilizing the grid. The end result of the distributed energy and storage resources should be a more resilient grid with less power outages than is typical when relying on a few power plants without disrupting comfort or homeowner behavior.?

Consumers can be active participants to achieve these goals for reduced energy consumption through connected devices and distributed resources at home.

Distributed Energy Resources & Net Zero Homes

Distributed energy resources are growing in popularity, driven both by consumer demand for clean energy resources and new legislation. Regulatory changes in California require new buildings to have solar photovoltaic (PV) systems for electricity and regulations in New York promote greater adoption of renewable energy resources. However, high costs, location, residence type, and other circumstances keep many consumers out of the renewables market. Community solar is an interesting new way for consumers to participate in renewables without having solar at home and at a lower cost.

As the pandemic continues to impact US households, perhaps no impact has been greater than the impact on the economy, employment, and ability for people to make ends meet. Twenty-nine percent of US consumers in households with broadband internet tell us they are “very concerned” with their ability to pay their bills– a percentage which has increased as the pandemic continues on.

At the same time, consumers have spent more time at home over the past year and residential energy consumption is up. This is leading utilities to evaluate new ways to engage consumers in demand response programs and with solutions to help consumers manage their energy resources. With the move to cleaner energy and the electrification of the home, we expect to see more of the following being adopted in the next few years in new construction:?

• induction cooking
• heat pump water heaters
• heat pump clothes dryers
• solar
• battery storage
• charging infrastructure

Also expect efficiencies doubling of storage and various solar technologies, making this renewable energy generation more cost-effective.??

A few key trends Parks Associates is tracking around home energy management:

1.??????Familiarity with home energy equipment is modest and has not changed substantially over the past 12 months.

After modest gains in familiarity with most energy products from 2018 to 2019, our research of 10,000 internet households shows little movement was detected in the past few years. Just one-quarter of respondents report they are “very” familiar with electric vehicles despite the fact that a growing number of products are now on the market. At the same time, purchase int intentions for major home energy devices have slightly increased over the past 3-4 years.

Low familiarity is a key obstacle to tapping demand for clean energy solutions. High prices that limit accessibility to a broad range of consumers is also a barrier to adoption.

?2.??????There is a widespread desire to use clean energy as well as a fairly broad willingness to pay more for it.

Over 40% of respondents would prefer to live in a community-powered by solar energy; 35% are willing to pay more for clean energy.

????????Those taking steps to reduce energy consumption are far more likely to express a desire for clean energy and a willingness to pay for it.

????????Younger respondents express a stronger preference for clean energy as well as a stronger willingness to pay more for it.

There is a clear demand for clean energy services and devices. Community solar projects help expand the market for community solar energy by making it more accessible to more consumers regardless of housing type or location.

3.??????The ability to save money on energy bills is a more potent driver for solar panel sales than environmental concerns, according to our research.

The appeal of solar panel benefits varies by segment.?The ability to save money on energy bills appeals to most but energy stability and clean energy have limited appeal among those just taking “mindful actions.”

·???????Nearly one-third of those who do not own solar panels are likely to purchase them if they reduce their energy costs by 50%.

·???????Among consumers 18-44 years, almost half would purchase solar panels if they reduced monthly energy costs by 50%.

While the desire for energy independence and energy stability are key drivers of solar panel purchases, a higher percentage of consumers are driven by the desire to save on their energy bills. Marketing messages for solar energy equipment must emphasize the potential energy savings.

The future is bright for tech in the home and it's awesome to be onsite at KBIS 2022 and IBS 2022 to see the latest innovations for the smart home.? If you are in the consumer technology industry, we would love to connect with you. This excerpt is from Parks Associates consumer study: Smart, Clean, Connected: The Future of Home Energy Management

For more information about our research, visit www.parksassociates.com.