Deploying smart meters across Britain turned out to take longer than expected.  In a surprise move, on May 10, the U.K. Department of Energy & Climate Change (DECC) announced it will postpone the mass rollout of smart meters for another year.  The extra time is needed for vendors to work out technical issues associated with the new equipment and conduct further testing, the Department said.

Before the delay, the plan called for installing more than 50 million smart meters (both electric and gas) in about 30 million homes and businesses, beginning in 2014 and lasting through 2019.  Now the massive deployment will begin in the fall of 2015, with expected completion by the end of 2020.

Vendors for the most part welcomed the delay.  Angela Knight, chief executive of Energy UK, an industry trade association, said the delay was a prudent move, allowing the program to “be completed in a more efficient and cost-effective manner.”

Nonetheless, for vendors counting on 2014 deployments, this delay has to hurt at some level.  Companies like Landis+Gyr, a major meter supplier to British utilities, and Trilliant, which supplies smart meter communications gear to British Gas, will need to push back their manufacturing schedules.  They’ll have to find other business as they wait for clarity on technology issues in the United Kingdom.

For utilities, on the other hand, the delay brings relief.  They can now take time to better plan for the massive deployments and the logistical challenges they entail.  However, this delay does not signal a complete halt to new smart meters in the United Kingdom.  British Gas, for instance, has already deployed some 800,000 smart meters as part of the first phase of the national rollout, and a government spokeswoman said there is nothing to stop energy suppliers from installing smart meters now, even as there is a delay in the nationwide rollout.

Consumers won’t be able to manage their consumption with the latest technology as soon as expected, but the new metering system should have fewer glitches once it moves to the big rollout stage in 2015.

The delay shouldn’t come as a big surprise.  Reshaping the grid on a country-wide scale is a huge undertaking, and getting it wrong would set the United Kingdom’s smart grid back by years.

Carrier, the venerable heating-cooling hardware vendor, has partnered with startup ThinkEco to offer a new integrated smart thermostat that will enable consumers to register their central and window air conditioners with utility demand response (DR) and energy efficiency (EE) programs.

Carrier’s ComfortChoice Touch thermostat will combine with ThinkEco’s cloud platform, which is called “modlet” (stands for “modern electric outlet”).  The modlet platform can function without the need for a smart meter.  It also enables utilities to have access to real-time load data from window air conditioning (AC) units, and to control through DR programs all types of AC loads.

Because the platform resides in the cloud, consumers benefit by having access to their central AC systems through any web browser or mobile device using either the iOS or Android operating system.  So, for instance, a user could be miles from home on a hot afternoon but planning to arrive there in 45 minutes; thus, from a smartphone, the user could set the AC to start cooling the house now so it would be at a comfortable temperature upon arrival.  And though this functionality is not new (other vendors such as EnergyHub, EcoFactor, and Nest enable mobile-device access), it’s quickly emerging as a must-have feature for the latest energy management devices and cloud services.

For The DIYers

For now, Carrier and ThinkEco have yet to announce whether any utilities have agreed to offer their new thermostat-cloud setup.  However, given ThinkEco’s award-winning program with Con Edison last year in New York City that involved energy savings through window AC units, it’s a safe bet Con Edison is at least taking a look at a trial.  Carrier has no plans to sell the device through retail channels; the company will only offer it direct to utilities for DR or EE programs.  That is a choice worth reconsidering, in my view, as this thermostat would appeal to a wider audience of do-it-yourselfers.  Also, the HVAC-installer channel seems like a good fit for the device as well.   The selling price for the ZigBee-enabled thermostat was not disclosed, with Carrier saying only that it depends on volume.  However, it is likely to sell for less than $150, based on competing products in the programmable communicating thermostat (PCT) category.

The Carrier-ThinkEco alliance provides both partners with competitive advantages.  For New York City-based ThinkEco, it wins an expanded role in energy management and gains valuable branding recognition through its association with a household name.  It also provides ThinkEco’s utility partners more options for engagement with customers – to go beyond the meter.  For Carrier, the ThinkEco partnership enhances its product with new services that tech-savvy consumers like, and it fits with utility goals for EE and DR.  It also underscores an ongoing strategy by Carrier, which has struck similar deals with other energy management software providers in the recent past, namely Comverge and EnergyHub.

While this one partnership alone does not signal a giant step forward, it does have the potential to move the needle for home energy management.  This is the right kind of hardware and software innovation needed to drive the market, and shows that companies besides Nest can deliver new solutions, too.

Net metering essentially allows homeowners and commercial entities to barter electricity with their host distribution utilities.  At night, when virtually all of us are drawing power from the utility grid, your meter spins forward, adding to your monthly utility bill.  When the sun is shining and the solar panel on your rooftop generates electricity, with net metering, it actually spins backwards, removing demand for power from the grid.

Utilities complain that this policy is unfair to customers who do not generate their own power.  In California, the nation’s most successful solar market, the state’s three investor-owned utilities – Pacific Gas and Electric (PG&E), Southern California Edison (SCE), and San Diego Gas and Electric (SDG&E) – have calculated that the amount of solar photovoltaic (PV) coming online by the end of 2015 will add up to approximately $1.3 billion in increased electricity costs for ratepayers who lack solar.  In the utilities’ view, net metering customers are not being charged a fee to help maintain the grid that serves everyone.

Proponents of solar energy see net metering as a phenomenal success story.  According to a report developed by Crossborder Energy consultants and released earlier this month, net metering actually provides more than $92 million in benefits to ratepayers of PG&E, SCE, and SDG&E.  Interestingly enough, this new report claims that the majority of the benefits of solar PV flow to customers that do not have solar on their rooftops – since they reap the benefits of reduced demand on utility grids, lowering overall system costs.  Only PG&E residents incur greater costs than benefits, according to the Crossborder Energy study.

Net Metering (NEM) Costs (Red) & Benefits (Green) per CA Utility

(Source: Crossborder Energy)

Bringing this issue to a boil is a California state law that places a cap on net metering.  Thanks to a ruling by the California Public Utilities Commission (CPUC), the cap is now higher than originally thought: 5,700 megawatts (MW) of solar PV. But the CPUC ruling would also end the net metering program as of January 1, 2015.  The amount of net-metered solar PV feeding into California’s grid is currently just under 2,000 MW, and PG&E expects that the number of solar PV customers using net metering within its service territory will reach its cap this year ­ mobilizing solar advocates to increase the cap even higher.

To put this issue in context, consider the fact that California’s fiscal incentives for consumers to install solar PV are dwindling to near zero under the so-called California Solar Initiative (CSI) program.  Solar PV costs are declining to near the utilities’ retail price for electricity, but in order for consumers to fully maximize the value of their solar systems, net metering is now more important than ever before.

The solar industry is not fully united on the topic of net metering.  Some, such as Craig Lewis, executive director of the CLEAN coalition, claim there is a better way.  He likes the feed-in tariff (FIT) model that has flourished in some European countries, such as Germany.  The FIT pays consumers for the power they generate as it flows onto the wholesale power grid, just like any other power source.  “I think both the utilities and net metering advocates are right,” Lewis told me recently, acknowledging that calculating the cost shifts and benefits associated with net metering is incredibly complicated.  “If taken to the extreme, net metering could lead to a downward death spiral for utilities,” he warned.

Here’s the kicker: California utilities are allowed to charge ratepayers up to $0.28 per kilowatt-hour (kWh) for solar PV systems they own and build, while new projects developed under the FIT model by non-utilities are charging as low as $0.12/kWh.

Ford Motor Company intends to become your home energy management supplier one day – or at least try to.  The automaker announced a new effort at the Consumer Electronics Show (CES) last week in Las Vegas called MyEnergi Lifestyle, and the ensemble of players Ford has brought together for this project is impressive.

The companies joining Ford in MyEnergi include Eaton, SunPower, and Whirlpool.  Nest Labs and chipmaker Infineon are two other firms rounding out the group.  The goal is to show how typical consumers can significantly reduce electric bills by combining smart home appliances, cloud computing, solar panels, off-peak pricing, and plug-in vehicles.  Besides the car, which Ford would sell, the package of goods necessary for MyEnergi to achieve its goal includes:

• Energy efficient appliances like refrigerators, dishwashers, and clothes dryers
• Hot water heaters
• Connected smart thermostats
• Rooftop solar systems

Ford quoted a Georgia Tech computer model that predicts a 60% decrease in energy costs and a 55% cut in carbon savings from a typical home that adopts MyEnergi Lifestyle products.

That sounds impressive.  But so is the estimated price for all the gear: a Ford C-Max Hybrid goes for $25,200, a new energy efficient Whirlpool refrigerator costs around $1,100, a new clothes dryer is around $500, a basic hot water heater sells for around $500, the Nest thermostat runs $250, and a rooftop solar system goes for around $10,000.  The total comes to $37,550.  How long for a payback on that investment?

Half a Century

A typical energy bill in the United States is $1,248 per year.  It would take around 50 years to pay back the equipment investment ($37,550 divided by $748.80, which is 60% of the annual bill).  These are averages, of course, and a homeowner could start with one or only a few products, so the initial investment would be less, but so would the savings.  The vision Ford has seems out of reach for typical household budgets today. Where it does make sense is for a family doing a major home remodel or building a new dwelling; but add to that a new plug-in car?

So while MyEnergi Lifestyle is an intriguing concept by Ford and its partners, it has major hurdles and this idea is probably ahead of its time.  First, plug-in vehicle demand remains sluggish; for example, Nissan sold fewer than 10,000 LEAFs last year, less than half the original estimate.  Second, electricity consumption is not expected to rise rapidly; the Energy Information Administration projects electricity use in the United States will increase on average just 0.7% a year for households through 2040; thus, with relatively flat consumption, prices aren’t likely to jump quickly either, and without a big spike consumers are not likely to feel much pain.  Third, it will take at least another 5 years to get significant numbers of people to upgrade to products like smart appliances or more efficient water heaters.  Color me skeptical at this point.  I need to see stronger market drivers and fewer, or weaker, inhibitors.