Is Smart Grid opportunity in Residential or Commercial? I voted Commercial, but the popular media topic is Residential

I’ve watched the industry come up with energy monitoring solutions over the past few years, and I am amazed at how much attention the residential market gets vs. commercial.  I determined that the commercial market and data centers being the epitome of the right place for energy efficiency.  Which is part of what got me to spend more time in data centers.  Data Centers are the early adopters of the ideas, and we’ll get the rest of commercial to follow next like Hospitals.

After sitting in multiple presentations at conferences on energy efficiency and monitoring, I figured out that this was a futile effort to educate the masses.  The comparison I’ve used in consumer behavior terms is when you get your monthly bills how much effort do people spend on their credit card & bank bills vs. the utility bill.  Think about.  How many people spend even a tenth of the time on their utility bill vs. bank/credit card bills?

Why is smart grid in the consumer space popular?  It is easy for the media to talk about and relate to, making it a popular topic.  There are tons of appliance and electronic vendors who see the money to be made by selling smart grid features.  Utilities are viewed as progressive to come up with residential smart meter solutions.  Google and Microsoft are throwing efforts in as well.  Does this make residential the right one just because it is popular?

CNET news has an article that provides a perspective on the smart grid that supports the opportunity in commercial.

Businesses offer best path to money in smart grid

by Martin LaMonica

BOSTON--For consumers, the face of the smart grid is most likely to be a home energy monitor that gives people insight into home electricity use. But from a business perspective, there may be more action catering to business customers, rather than homeowners.

A panel of smart-grid company executives here at the AlwaysOn GoingGreen East conference on Tuesday said saving commercial, industrial, and business customers is an easier sell than helping consumers save on utility bills.

Images: The many faces of the smart grid

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Home energy monitoring systems and Web applications such as Google PowerMeter let people get details on where home electricity is going. But it's unclear at what point consumers are willing to make changes in their behavior based on that information.

And raises the issue of consumer behavior.

"I think we need to temper our expectations," said Tim Healy, the CEO of energy efficiency company EnerNoc. He noted an "apathy found by consulting company the Shelton Group, which found that consumers would be willing to spend $129 more a month on energy bills before taking actions, such as buying an EnergyStar appliance or scheduling dishwasher or dryer jobs to take advantage of off-peak rates. (Click for PDF of study.)

And, here is a big wake-up call from an Accenture survey.

Consumers Reject Lower Energy Use As The Answer to Reducing Reliance on Fossil Fuels and Energy Imports

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March 09, 2010

Consumers call for strong government intervention in energy market

NEW YORK; March 9, 2010 – Three out of four consumers are concerned by energy and climate change issues, but nearly two thirds say that using less energy is not the answer to reducing reliance on fossil fuels or foreign energy supply, according to global research by Accenture (NYSE: ACN). The survey of 9,000 individuals in 22 countries also shows that almost nine out of ten consumers want more government intervention in the energy market.

The survey reveals this interesting consumer behavior.

· When asked why they think reducing reliance on fossil fuels is important, 60 percent of Americans say dependence on foreign oil while 26 percent say climate change and reducing emissions.

· Globally, 49 percent of respondents say lowering emissions is the chief reason to reduce dependence on fossil fuels while 32 percent say dependence on foreign oil.

· In the U.S., extreme concern for climate change declined to 36 percent from 53 percent in the past year.

· U.S. consumers see new forms of energy as a better solution than reducing demand, with 62 percent favoring alternatives and 38 percent favoring curbs on demand.

I am so glad i lowered my expectation in the residential scenario for energy efficiency.  Just because I turn off the lights, watch my energy consumption like a lot of you doesn’t mean the rest of the public will change their behavior.

There is no Prius badge people can wear by shaving their electricity use by 10-20%.