Yesterday President Obama announced $3.4 billion in grant awards for smart grid investments under the American Recovery and Reinvestment Act (ARRA), the stimulus law passed earlier this year.
Among the goals of this spending are infrastructure improvements to make it easier to integrate renewable energy sources into the power grid; improve grid reliability and reduce outages, which the President said cost Americans over $150 billion per year; and eventually reduce consumers’ energy bills. (The cost of power outages is something I cited as support for grid investments in an earlier post on the smart grid.)
Smart Meters a Favored Technology
The president’s talk of reduced energy bills is a reference to the strong support for smart meters reflected in the grant awards. Most of the projects the government is supporting with these grants involve the installation of smart meters. As the president said,
Smart meters will allow you to actually monitor how much energy your family is using by the month, by the week, by the day, or even by the hour. So coupled with other technologies, this is going to help you manage your electricity use and your budget at the same time, allowing you to conserve electricity during times when prices are highest, like hot summer days.
The “other technologies” he mentioned include in-home energy displays, the focus of a market research study I am currently wrapping up and which should be published in the fourth quarter of this year.
One Million In-Home Energy Displays
According to an administration summary of the grants, the funded projects, when fully implemented, “install more than 1 million in-home displays, 170,000 smart thermostats, and 175,000 other load control devices to enable consumers to reduce their energy use.”
These grants are a boon for the winning utilities and the vendors they have selected as suppliers and implementers. And, assuming these projects largely deliver on the hope-for benefits, these projects will prime the pump for large-scale deployments over the next 5-8 years in the U.S. and, over a longer time period, globally.
Stimulus Temporarily Stalled the Smart Grid Market
Over the last couple of months, I’ve spoken to many technology vendors in this space, as well as utilities that had submitted smart grid proposals. The general consensus among this group about the impact of the stimulus was that it had the comically ironic effect of putting the smart grid market in a state of suspended animation. With billions of dollars of grants in the balance, any utility that had been contemplating making an investment in smart grid technologies had every reason to put it on hold until it learned whether the government was going to foot part of the bill.
So the vendors watched and waited (after helping their prospective customers with their grant applications).
Some Utilities Will Proceed Even Without Grant Money
I spoke to one utility today who had ambitious plans for smart meter and in-home deployments in its service area. The utility, a cooperative, did not receive a hope-for grant to fund half of the over all expense. They are disappointed but say the intend to press forward with their plans, albeit on a slower deployment schedule. And they hope to submit a revised grant proposal for a second phase of awards.