Energy Conservation 2.0: Can smart devices deliver on conservation?
How can a regulated business like a utility — which is not allowed to invest directly in product development — advocate for conservation in a market driven by consumers?
There’s no question that consumer electronics are showing potential to leverage behavior, but their potential for energy savings is less clear. Although energy-focused, one-offs like the Nest Learning Thermostat and voice-command Amazon Echo have become consumer successes, they don’t reflect current norms.
“A common design process model is used in consumer-packaged goods,” explains Jon Plummer, director of user experience at Belkin International, the maker of WeMo products. “Product developers look at consumer situations to understand consumer needs that could use solutions. Then they look at potential consumer benefits to think through product design options.” (For more information, view slide 10 or the full archived recording of a recent CEE webinar on the subject.)
As it stands, conservation concerns are not baked into the development of most consumer electronics. Product developers aren’t charged with making devices that drive at energy conservation goals, and utilities don’t have the jurisdiction (or the skills) to develop their own devices. So utilities are left to wait and hope that product developers and manufacturers will build conservation into new products.
The Current Situation
For decades, utilities have been in the business of selling power — not developing or selling new technologies and devices. Early energy conservation goals for most of the last half-century have focused mostly on “set-it-and-forget-it” building systems and control devices. Today, demand from communities and individuals to address climate impacts, enhance service resiliency, and keep utility bills affordable drives utilities to provide more energy saving options and services. But utilities are regulated in ways that prohibit them from investing directly in technology research and development.
Furthermore, current regulatory requirements in most states aren’t poised to credit utilities for the behavior-based savings that consumer electronics can help drive. Susan Norris, senior manager of energy efficiency products at Pacific Gas & Electric (PG&E) explains that savings come via three channels: structural, system-wide improvements; individual tools and devices; and human behavior.
“There are savings from structural improvements,” says Norris, “and from more efficient, gadget-based devices. And distinctly different, but also important, are the efforts that go into the people component — the engagement or messaging-based platforms or technologies.” Approaches might include things like smart windows or appliances, a portal that integrates weather and home energy information, or consumer-goods packaging designed to popularize best practices. Norris reiterates, “A significant body of research indicates that behavior changing devices have worthwhile energy savings potential.”
By and large, regulators require utilities to provide large, randomized trials or other studies before a utility can claim energy savings. This method works reasonably well when considering traditional technologies that save energy at predictable or recurring rates — but not so well with behavior-based tools and platforms that drive savings at a much faster pace.
In states like California (where PG&E operates), conversations around behavior-based approaches have started entering into policy debates (e.g., recent CA legislation Senate Bill 350). Although processes already exist in California to evaluate and verify “gadget-based” approaches, support to evaluate conservation-related customer engagement (Norris’ third channel) is a brand new consideration.
Although product development companies conduct extensive market research and usability testing to fine-tune product designs, conservation isn’t usually among their top drivers — and, consequently, they don’t usually invite utility companies or other conservation advocates to the drafting table.
Moving Toward a Solution?
Lester Shen, Ph.D., director of innovative technologies at the Center for Energy and Environment thinks we are moving toward a solution. For the last six years, Shen has written about a concept he calls human-building interaction. Inspired by the popular study of “human-computer interaction,” Shen’s approach brings stakeholder input together with user-centered design to inform the creation of conservation-oriented products.
Extending Shen’s approach, what if utilities started working directly with product developers to provide input? They would bring an important stakeholder perspective, as well as unique knowledge of how customers use energy and a growing understanding of market segmentation. Additionally, utilities could be a good potential partner on product development and usability testing. Some utilities provide “midstream” rebates (paid directly to the product distributor so the consumer experiences the rebate as a time-of-sale “discount”), and utilities could offer similar financial incentives to companies that create impactful devices.
One of the not-so-apparent challenges of collaboration between utilities and product developers is the vastly different scales at which the fields operate. Utilities function within local service territories in a regulated environment; product developers operate across a national or international market, and need to consider strategies to help maximize competitive advantages. For these multi-million and billion dollar companies, working exclusively with one or two utilities only appeals if it will lead to additional utility support, market niches, or greater market penetration.
Human-building interaction lends itself to address issues both of scale and of regulated limits on product development. Shen suggests that by moving toward a human-centered development process that fully engages utilities and other conservation stakeholders, the resulting products would hold greater potential to appeal to markets well beyond small, single-utility territories.
And Shen’s approach can scale up or down as useful to develop new (or enhance existing) consumer devices, because singular solutions can be replicated for multiple utilities. When successful, the results might look like a color-sensing washing machine that optimizes water temperature and clothing care, or a smart refrigerator that signals when too much refrigerated air has escaped. Such stakeholder-based approaches could even be applied to more traditional building asset technologies like heating and cooling systems, moving beyond the world of consumer goods.
Smart devices could be better designed to offer powerful opportunities for energy saving, likely leading to broader product use and better sales. So what steps can advocates take today to ensure conservation gets a more constant seat at design tables where new tech innovations continue to take shape?