Three-dollar-a-gallon gas. Skyrocketing heating costs. Four-figure electric bills. Longer and more frequent blackouts. Ever-mounting environmental concerns. The cheap, carefree energy ride that Americans had been enjoying for decades has not so much drawn to a close as ended with us being shoved out of a speeding car driven by a loan shark as a final warning to “pay up.” But aside from following Jimmy Carter’s suggestion during the 1970s energy crisis to wear a sweater, what’s an average homeowner to do?
As if the rising cost of electricity weren’t bad enough, power outages are becoming more widespread and frequent. From mega disruptions like the East Coast blackout of 2003 to weather induced outages, interruptions cost Americans over $80 billion annuallyÂ¹. Couple that with our increasing dependence on electricity (how long could you survive without broadband or cable/satellite TV?), and you can see why companies selling backup power solutions are doing a booming business.
The problems of expensive, unreliable power and an increasing dependence on it largely exist because the homeowner has no control over electricity costs, production or delivery and no visibility into how he’s using it.
It’s a fundamental rule in business that you can’t manage what you can’t measure, and this axiom applies to our personal lives as well. The first step in saving money is figuring out where you’re spending it. To start losing weight, you first keep track of what you eat and when. But how do you begin to monitor electricity consumption around the house?
Sure, we’re told that replacing incandescent light bulb with compact fluorescents and turning lights off when not in use saves electricity, but how much? And when we start talking about sacrificing comfort & convenience â€“ by turning your water heater down a few degrees or turning the thermostat down a notch or two â€“ we’ll be much more inclined to put up with being a tad bit cooler if we know we’re saving big money on our utility bill.
But we get more detail on a $30 cell phone bill than on a $300 electric bill. How does one go about getting the information needed to make intelligent decisions about energy management? Moreover, how can you manage your energy usage in, well, a manageable way? This situation is now beginning to be addressed by technology and by government.
Timing is Everything
Speaking of cell phones, most people are familiar with the general rate structure, namely that there are times considered “peak” and “off-peak,” and the per-minute charge is higher during the peak periods. This is because the peak periods stress the capacity of the cellular network, and it costs the phone company more to operate at those levels. Electric utilities call this time of use (TOU) pricing, and have been offering it to their commercial customers for decades.
In general consumers pay three to four times more for peak usage, generally charged during prime business hours. One California utility’s residential TOU schedule E-7 lists its peak time as noon to 6 p.m. Monday through Friday. PG&E’s residential summertime peak rates are over three times the off peak rates, so if running the air conditioner for an hour during the weekend (considered an off peak time) costs 50 cents, that same hour during the week will cost more than $1.50.
The Energy Policy Act of 2005 empowers homeowners to take advantage of TOU pricing because it requires every utility to offer it to residential customers by February 2007. By using TOU pricing to shift 10 percent of usage over to off peak, a homeowner could shave up to 15 percent* off the electricity bill, while still consuming the same amount of electricity — just at a different time of day.
Roll Your Own
Another way to reduce energy costs is to generate your own, what’s known in the industry as distributed generation. The increasing price of electricity is quickly moving solar power from the realm of the hobbyist into the mainstream. Many states, such as California and New Jersey, even offer significant rebates of 50 percent or more to homeowners who install a photovoltaic (PV) system, and similar rebates apply to wind turbines and fuel cell systems. The federal government allows a tax credit of up to $2,000 per solar system and $500 per kilowatt for a fuel cell system, in addition to state and local incentives. To learn more about incentives offered in your area, visit www.dsireusa.org.
The future starts now
On the technology side, companies are working on innovations that will benefit consumers and change the way we create, purchase and use energy. One example is Washington, D.C., based GridPoint, which helps home and small business owners automatically manage energy by taking the mystery out of how energy is being consumed. GridPoint’s intelligent energy management appliance manages both traditional and renewable energy to reduce costs â€“ and also provides clean, silent and automatic backup power. GridPoint provides online access to information about the amount of renewable energy produced, times of peak usage and energy consumption by major appliance, and allows consumers to benefit from TOU pricing. Additionally, GridPoint’s appliance automatically sells excess power generated from the renewable energy source to the utility company, further reducing energy costs.
The new energy law signed by President Bush this year is also a good start to create a more user-friendly energy industry. But this is only the beginning. Just as the Internet empowered millions with easy access to information and brand new ways to communicate, emerging technologies will also bring sweeping changes in energy production and consumption. Consumers can accelerate and participate in this revolution by educating themselves about their options and seeking out new methods and products that help them make intelligent decisions to increase their energy efficiency and independence.
*Savings may vary depending upon consumption and the TOU pricing offered in a utility’s service area.
Brian Golden is product marketing manager for intelligent energy management company GridPoint, www.gridpoint.com