My daughter and son-in-law own a smarter home. It has a 6.5 kW solar system which is connected to a Tesla PowerWall battery system. The house is also connected to the grid. The entire thing is operated through a smart phone app.
They also own an all-electric Tesla 3 which is operated through a smart phone app as well. They recharge the Tesla 3 through their home’s fast-charging station. The car’s recharging is timed to draw electricity from the solar panels while insuring that the solar panels also fully charge the batteries by sunset.
The home’s smart phone app has a data dashboard that shows system operations. It provides kW demand and kWh energy data. This data dashboard has a chart showing how much of the home’s solar system is fulfilling the home’s electricity consumption versus how much is being fulfilled by the batteries versus how much is being supplied by the grid. The dashboard also shows how much electricity the solar system sends into the grid. On a typical sunny California day the home uses zero grid electricity. In fact, it averages sending 17 kWh of electricity back into the grid per day. The electricity sent into the grid is up and beyond the system’s generation used to run the home’s appliances, recharge the batteries, and charge the electric car.
This phone app also has a chart that displays how the system operates over a 24-hour period. The chart uses various colors to demonstrate the home system’s operations. One color is for electricity the home uses from the solar panels. Another is for the electricity consumed from the battery. A third color is for the electricity drawn from the grid. A typical day starts with the battery system supplying the household’s electricity needs. Around 10 am the solar system begins displacing the battery system’s operation. By 3 pm the solar battery system is back to full charge and the home is operating 100% on solar generation. By sunset the house is back to running on battery power.
This home is now immune to the grid’s power outages that last less than a few days. A few weeks ago the home’s lights blinked. It turned out that the grid experienced a blackout. The blink was the home responding by automatically switching to battery system operations. My daughter and son-in-law did not know there was a blackout until they read about it a few days later.
Somewhat embarrassingly, energy efficiency has taken a hit in their home, however. There are no high electric bills to punish them for leaving lights on or keeping the A/C at 72 degrees. Since the home’s source of electricity has zero greenhouse emissions there is no guilt in enjoying having more lights on than absolutely needed.
This home system does not make economic sense based on traditional 2-3 year payback expectations. Even with California’s high electricity rates the investment in solar equipment and batteries is unlikely to realize a payback for over a decade. But a real incentive for my daughter and her husband was the avoidance of brownouts and blackouts. Today in California there is a real human health and economic cost from utility lines sparking devastating fires. The current solution is for the state’s utilities to cut power during high fire risk days that are increasing in number due to global warming. This system avoids those costs. The value of such protection is even higher now as more people work from home due to the coronavirus.
The economic future rests on smart buildings that win on economics, reliability and sustainability. The day is fast approaching where smart buildings with solar/battery systems optimized in real time by an artificially intelligent control system will fulfill consumer desires for lower electric bills, zero emissions and increased reliability. This emerging threat to existing electric monopolies has driven utilities, and too often their regulators, to install protectionist pricing and policies. The result is a utility industry that appears to be moving slower than Greenland’s melting glaciers in adopting 21st century technologies now being used in smarter buildings.
Encouragingly, there are some state legislatures that are taking the initiative to improve consumer access to smarter building technologies. Their actions are succeeding in sparking consumer demand for smart building technologies. That, in turn, increases manufacturing economies of scale that will enable a downward spiral in per unit costs. A tipping point is in view where smart buildings will cross the electric bill chasm to become the least cost consumer solution. As an economist, I am betting that the technology and business model that delivers lower electric bills with zero emissions while increasing reliability will win. And then, so will we.