Can Green Be Free?0

Katherine Tweed | Wed May 18 2011 |

Home energy management systems are coming, and the best part is, you may not even have to pay for them.

BC Hydro, a large utility in Canada, will roll out two million smart meters to its customers over the next two years. In addition, they will offer rebates for home energy management systems in stores that will help lower the total cost to consumers.

Despite an ongoing campaign to explain the benefits of home automation to consumers, few have been installed because of the high price tag. Many systems can cost $300 or more, a hefty upfront cost for consumers that at the end of the day might only save $40 a year. But these systems—if deployed in large numbers—can help utilities avoid firing up peaker plants or building new power plants. A few hundred per house might look like a good idea.

Technically, nothing is free. Smart thermostats cost money and so do things like home automation systems. But with the right programs, these technologies can be free from the perspective of consumers. If a utility pays for it, the price tag—as far as a household is concerned—is zero for a new thermostat. In fact, it’s better than free. Because it will reduce power consumption, it is a free gadget that saves them money.

Under a solar lease, consumers have two bills—one to a utility and one to a solar provider—on average, the sum of the two is less than the cost of the typical electricity bill.

Companies like Xtreme Power selling utility-scale storage technologies to solar farms and wind farms say that their battery banks—which have a sticker price of thousands of dollars–will actually reduce the overall cost of the power plant. How? Utilities will pay fees to power plant owners to exploit the batteries during peak power moments.

In the commercial building space, Transcend Equity will pay your utility bill, and in exchange building owners have to pay Transcend to conduct a retrofit that will lower power consumption by 25 to 40 percent.

For air conditioning, Ice Energy’s ice-based energy storage at commercial buildings has the potential to shift as much as 40 percent of peak energy demand to off-peak hours. In a nutshell, the company’s air conditioners make ice at night when power is cheap. The ice blocks then melt in the daytime, providing air conditioning. Building owners don’t have to buy as much power in the afternoon, when the price spikes, and utilities don’t worry as much about stress to their grids on a hot afternoon. Some utilities are considering giving away the air conditioners. Free LED bulbs? When the bulbs hit $20, it’s a possibility: utilities may begin to give out LED bulbs as a way to curb power consumption.

Of course, the key to all of these ideas is “if” and “regulatory.” No two utilities are alike, and neither are their Public Utility Commissions, and so the pricing schemes to give efficient technologies a quick payback will never be the same everywhere.

From community storage and subsidized home energy management tools to leased solar, there are likely to be many clean energy technologies that come to market at a fraction of their real price. And if third parties can find ways to build other revenue streams on tops of them (think iPhone apps), expect to see even more options. In regions with aggressive goals, hot weather and high prices (like California) — expect to see some or all of these options available, at least for a while.