Silver Spring’s Energy-Saving Home Experiments

Here’s just a few results of a year-long home energy project in Oklahoma: web portals are great, in-home energy displays help, but smart thermostats are the best at cutting power when utilities need it most. Oh, and don’t forget to set the right electricity prices if you really want people to pay attention.

The year-long project, which was led by networking company Silver Spring Networks and utility Oklahoma Gas & Electric, in Norman, Okla. gave 2,500 homeowners a wide array of home energy management devices, platforms and pricing structures to try out. The partners said they were able to cut peak loads by up to 57 percent, and cut average, across-the-board energy use by up to 33 percent, over the hot Oklahoma summer last year.

Those high-level results were driven by a combination of smart thermostats built by Energate, home energy displays and web portals from Silver Spring, and a set of consumer programs designed by OG&E to test how people reacted to different power pricing schemes.

Automated thermostats yielded the big peak reductions, but simple energy displays also drove a good deal of energy efficient behavior, Eric Dresselhuys, Silver Spring executive vice president and chief marketing officer, told us this week.

Silver Spring hasn’t yet broken down the study by different technology and utility program to see which combinations yielded the best results, Dresselhuys said, but he pointed out that, amidst ongoing debate about which technological approaches are best for home energy management, sometimes people forget the importance of prices. Like: “You have to get the rate structures right, to put enough of a carrot out there that people will actually pay attention.”

OG&E offered customers two types of programs to choose from. The first program offered time-of-use prices that only change a few times per day, though they included the possibility of a half-dozen or so “emergency” days when customers could be charged more than twice the usual price per kilowatt-hour.

The other program was a “variable peak pricing” plan that gave homeowners up to hourly changes in power prices based on wholesale power markets. Prices there could range from 4.5 cents per kilowatt-hour on off-peak to 11.3 cents at standard usage time, or 23 cents and up for high-usage periods, compared to a flat rate of 10 cents per kWh, said Brad Bogolea, manager for Silver Spring’s CustomerIQ product line.

That’s a system that could really encourage people to use big loads like washers, dryers, air conditioners and hot water heaters during off-peak hours. Indeed, the pilot project tracked a 1-percent increase in energy use during off-peak periods — an interesting counter-measure to the energy savings that come when power costs more.

It will be interesting to see how Silver Spring and OG&E break down their data further — the two are expecting to release more analysis in the next month or so. Silver Spring is expanding beyond its core smart meter networking to encompass more and more home energy systems, with its own technology acquired from Greenbox in 2009 and with partnerships such as one recently announced with Control4.

One piece of Silver Spring technology that’s going to see a lot of use soon is its consumer-facing energy dashboard, which is now being rolled out to all of OG&E’s 775,000 customers, the companies announced last week.

Web sites are cheap, but what about in-home devices? Lots of utility pilot projects are now underway to find out which combinations of technology yield the highest efficiency benefits, and at what costs. Pepco did a similar study with eMeter last year in Washington D.C., which also diagnosed how different technologies worked with different pricing programs.

There’s little doubt that automating household systems, like thermostats, yields greater benefit but at greater cost. Whether approaches that rely on getting people to change their behavior offer more immediate and long-term promise is a bit of a debate right now in the smart grid industry.

But Dresselhuys sees that as a false dichotomy — “You’ve got to have both — and oh, by the way, a couple of other things, like get the incentives right,” he said. Indeed, without getting the “third leg of the stool” that is pricing in synch with new technology and new marketing, electricity prices are just too low for most people to care too much about them.

How long they remain that low remains to be seen, however. Utilities around the country are mulling ways to move residential customers off flat rates and onto some form of pricing scheme that more accurately resembles the real price of power on the wholesale market. In Texas and other deregulated-competitive markets, people can already choose from an array of pricing contracts, and the diversity is growing.

PS – Dresselhuys declined to comment on speculation that Silver Spring will hold an initial public offering this year, but a lot of people are expecting it.

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Image courtesy of mark_potter_2000 via Creative Commons license.