As California regulators and utilities explore offering real time pricing (RTP) signals to end-use customers and devices, they should examine some of the early findings from ComEd in Illinois, which has been actively piloting RTP with residential customers for several years.
While the benefits of RTP signals include helping to optimize device and appliance usage to better manage the grid, reduce carbon emissions and ultimately drive down costs, energy practitioners should consider how end-users can and will interact with RTP, then work backwards. Over a decade ago, many in the industry assumed residential customers would be on their smartphones manually optimizing their heating and cooling loads to take advantage of more static dynamic prices, such as time-based rates, which are now standard across most of California. Unfortunately, the cost of effort versus the benefit of bill savings didn’t pan out for most people. Utility practitioners realized customers not only need price signals, but active and practical ways to manage energy use to take advantage of pricing when convenient.
Appliance makers will also need to understand the clear value proposition to begin to build appliances that can stop/start as needed, yet efficiently and effectively clean the dishes and do the laundry without creating water spots or dewy smelling clothes.
The RTP exercise should be no different. Customers need easy ways to respond to signals. While end-use automation is almost necessary for RTP effectiveness, the average household doesn’t typically go out and buy new appliances so they can have the latest and greatest Wi-Fi enabled refrigerator or dishwasher. Appliances are either bought, as there is a need to replace the previous appliance, or people buy new homes, remodel etc. Thus, adoption of the automation capabilities will be slow unless there is a clear value proposition or incentive to make such an upgrade.
While automated appliance adoption will be slow, users need to be provided RTP signals in a simple and understandable way so they can begin to make small adjustments when convenient for them. Eventually, when the washing machine or dishwasher needs replacing, customers will understand the value proposition of automated capabilities.
The path to educate customers to prepare for this optimized future is simple. Offer RTP combined with simple tools that educate all energy users in the home. While we will say the clear, obvious and only solution is Flick, ComEd in Illinois recently conducted a survey of over 5,000 residential customers to help inform ComEd’s RTP pilots. When asked about generic simple reminder devices that might change colors based on pricing, 90% of customers said they were interested or slightly interested in such technology. However, when asked about what smart home technologies were used in the home including smart thermostats, appliances, smart speakers or “other,” 49% of customers “do not use any smart home technologies.”
While ComEd offered high price/peak time alerts via text, email or phone call, one verbatim customer response said:
“More alerts on price drops and increases. I only get "daily" alerts when energy price is high, but I wouldn't mind an equal alert when pricing is extremely low and could run major appliances.””
Flick looks forward to helping utilities and end-users realize the benefits of dynamic pricing and more complex RTP programs.