Consumers who have grown up under the “everyday-low-prices” model of marketing for everything from toothpaste to new ceiling fans are applying that same set of expectations to their utility bill. Consumers are demanding — and new companies are supplying — lower cost and higher control energy solutions, including LED lights, smart thermostats, and rooftop solar panels.
Changes in consumer demand and energy economics are also driving activity at the capitol. State legislators are actively shaping energy-related policies, and regulations matter with more than 2,200 bills pending in the 50 states in 2014, according to the Advanced Energy Legislation Tracker from Colorado State University’s Center for the New Energy Economy. More than half of all states have enacted quantitative energy efficiency targets, and many states are now offering incentives to utilities to fuel drops in energy demand.
New technologies and customer demand will spur a continued call for energy efficiency in 2015. Here are five opportunities for the energy efficiency market next year:
1. Immediate energy status overview. Goodbye, paper utility bills. Smart consumers want fast, easy access to information about their energy usage, tips, and service. Utilities will accelerate their efforts to create mobile-friendly, social, and gamification solutions that allow consumers to connect with utilities in previously unimagined ways, and an increasing number of businesses will emerge to serve consumers from new, unique angles. Utilities like DTE Energy with its Insight App give consumers access to their home energy use through their smartphones. In addition, product offerings such as Bidgely’s HomeBeat are providing customers with personalized insights regarding their energy consumption, as well as neighborhood comparisons — down to the particular appliance in use.
2. Light-emitting diodes. (LEDs) will hit the big stage. In 2014, LED inventors won the Nobel Prize in physics. There is still a lot of value left in compact fluorescents, but we will see a big leap to LEDs in the coming year as costs drop, quality and product diversity increase, and integration and innovation soar. We can expect to see more innovation in energy efficient lighting from companies like EarthTronics, Inc. and Precision-Paragon (P2), which will also help cut energy consumption.
3. Mix-and-match solutions. We’ll keep wrestling to find the right mix. Integrated demand side management will accelerate mix-and-match energy efficiency, combined heat and power (CHP) systems, demand response, storage, and renewables to create a more customizable suite of energy solutions than ever before. In 2015 we’ll see a greater adoption of holistic systems that incorporate distributed energy resources like energy efficiency and energy storage to balance the variability of renewable energy resources like wind power, solar, small hydro, and CHP. Utilities will need both a seat at the table and rewards for making it happen. Several utilities like PacifiCorp, National Grid, NSTAR Electric and Gas, and Con Edison have plans underway.
4. Real-time pricing. The fast adoption of smart meters is making real-time pricing possible, with more than 46 million meters installed nationwide to date. Smart meters make it possible for real-time communication of energy data between customers and utilities, which paves the way for dynamic pricing. With big swings in energy prices based on time and location, we’ll see better matching of energy supply and demand through instantaneous price changes. Nest has captured a lot of attention with its easy to use smart thermostat, but other products from companies like Ecobee and Honeywell put real-time energy control in consumers’ hands as well.
5. Regulated carbon cuts. Expect a tumultuous year when it comes to U.S. EPA Clean Air Act section 111(d) — final regulations are expected in the summer of 2015 and lawsuits are involved. The proposed rules would require states to reduce carbon emissions from generation by almost 30 percent. Energy efficiency will be one of the strategies leveraged to meet reduction goals.
In the year ahead, we’ll see utilities and regulators scrutinizing the ROI on energy efficiency programs during a period of lower cost fuel and declining load. Some states may even relax energy efficiency policies and regulations in this environment, even though consumers will expect utility programs to help them make sense of the dazzling and confusing array of options.
The long-term economic advantages of energy efficiency, driven by the forces outlined here, position energy efficiency to have a powerful 2015.
Jonathan Kleinman is vice president of policy, design, and evaluation at CLEAResult. He analyzes state and federal policies, regulations, and initiatives to identify the specific ways that policy changes impact clients. He also guides programs and clients through the evaluation of energy savings. He is a Certified Energy Manager and LEED-Accredited Professional. He holds a B.S. in mechanical engineering and a B.A. in environmental policy from Cornell University, and M.S. degrees in technology and policy, and civil and environmental engineering, from the Massachusetts Institute of Technology.