Smart Grid Leads to New Retail Sales

September 23, 2009 By Janet Pinkerton

multipage

During the next two years, power utilities across the country will initiate projects to transform the nation’s electrical grid from a centralized, producer-controlled network to one that is less centralized and more interactive with consumers.

To prepare for related product and service sales, CE retailers should look at what the utilities are planning in their markets and how to leverage the opportunities. Best Buy—with its Geek Squad, increasingly energy-savvy product mix and recent capital investment in Control4—as well as a handful of specialty dealers and custom installers are already targeting the home energy-management business. During the next 12 months, CE retailers will find themselves answering customer questions about electric utilities’ plans to install Smart Meters, which will provide home and business owners with a variety of information from real-time energy usage to real-time pricing.

Those changes will present opportunities to sell energy-management systems, adapter modules, energy-load meters, and appliances designed to communicate with the “Smart Grid” and help consumers save money on their electric bills. Some retailers and custom integrators also will compete for utilities’ contracts to install basic home energy-management systems.

The impact of a smarter power grid is expected to become a significant market issue starting in 2011, spurred by roughly $4 billion in federal stimulus money for Smart Grid deployment and demonstrations. The federal government received more than 400 grant proposals for the Smart Grid stimulus money, which will be awarded from Q4 2009 thought 2010.

Changes in the electrical grid are expected to occur in crazy-quilt fashion. Utilities will deploy the Smart Meters and infrastructure needed to improve the flexibility and efficiency of their power infrastructure by region. But utilities are expected to move fast, as those receiving federal stimulus grants for Smart Grid deployment face a two-year deadline for using the money. “Utility changes are typically slow to happen, but there’s real impetus this time for what utilities are trying to do,” said Brian Markwalter, vice president of technology and standards at the Consumer Electronics Association.

Basic Benefits
So what is a Smart Grid and why should consumers and dealers care? At the macro level, a smart power grid uses digital technology to support two-way communication of information in the generation, transmission, distribution and consumption of electricity. Each utility has its own technology/business plan. Possible Smart Grid benefits include:

• Utilities can better monitor and manage system-load requirements in real time to proactively avoid outages and brownouts.