By: Kevin Williams
Categories: Money Savings
Traditionally, the relationship between home energy consumers and utility companies has been non-cooperative. The fact is that one is a buyer and the other is a seller of a product that virtually everyone needs. This logically results in a zero-sum game where a price change that benefits one also harms the other.
The situation stems from the fact that for more than 100 years the energy distribution model has assumed a one-way transfer of electricity. During this time, government utility regulators have always had to compromise between the business interests of the utilities and the demand for low-priced energy from consumer.
Unfortunately, this pricing model undermines the development of green and renewable energy sources as they can detract from the amount of electricity a utility can sell. In addition, many states are considering new electricity rate structures that reduce or do away with the benefits of using solar or wind energy to power the home.
However, intelligent energy storage systems make it easier for consumers and utilities to find a situation that benefits them both. The challenge is to find a pricing system that accurately values electricity depending on its volume and flow throughout the day. Here are three ways that this can work:
Homeowner-focused model – This model focuses on the homeowner actively monitoring and addressing their individual home’s energy needs. You do this primarily by altering home energy usage behaviors. This is especially feasible with an intelligent energy storage system that tells you how much energy your home consumes.
Utility-company focused model – This model focuses on having the utility companies acquire or make use of intelligent energy storage technology. This way, they can store energy that would otherwise be wasted and then use it during periods of peak demand. This would reduce the amount of fossil fuels that need to be burned and decrease the need for peaker plants to provide extra electricity.
Third-party administrator model – This model focuses on having a third party such as a regulator or government entity oversee the relationship between the energy consumer and the utility company. In this approach, the goal of the administrator is to ensure that dynamic pricing models are fair for each party. Their interest is to also ensure the flow of data about energy usage from the consumer back to the utility.
It may seem like there’s a natural conflict of interests between energy consumers and utilities. However, intelligent energy storage systems that communicates energy usage data to consumers and utilities can help them find a middle ground where cooperation leads to the greatest benefit for everyone involved.