Just Say No to a Smart Grid Slowdown

Ah, Bakersfield, California. A lot has happened since the city’s new smart meters delivered  jaw-droppingly high energy bills to residents. Fast-forward a couple of months and the technology is being called into question, a lawsuit has been filed and PG&E is tapping the brakes on its smart meter roll-out.

The most troubling aspect of the debacle is the idea that the industry should slow down and catch its breath, and indirectly, that customers, particularly the elderly, aren’t ready for newfangled technologies and pricing schemes. Frankly, it’s nonsense, and there are a couple of very good reasons for utilities to keep their foot on the gas, so to speak.

Consumers Are Ready

Earlier this year, IBM surveyed 5,000 “energy consumers” from around the world about their attitudes toward smart grid technologies. What the company discovered is that 70 percent of those surveyed were willing to become engaged, through technology, with their utilities, and a whopping 90 percent (both young and old) desired smart meters and other energy management tools.

Consumers have historically shown remarkable adaptability to market conditions, and we don’t have to look too far into the past for an example. Recently, when gas prices skyrocketed and the recession bit deeply into household finances, consumers snatched up fuel-efficient rides and let SUVs — until then, the darling of the auto industry — languish on dealer lots. Now, we’re less than a year away from seeing mass-market plug-ins like the Nissan Leaf and Chevy Volt public roads.

Given the right motivation (lower energy prices), tools and an ecosystem of intelligent devices and appliances, consumers will make smart decisions about energy. Successful pilot programs like those in Fayetteville, N.C. and a GridWise project in the Seattle area are evidence of that.

The Market is Ready

An uptick in cleantech VC and M&A activity shows that the market is hungry for smart grid-fueled prosperity. Just this week, Silver Spring Networks raised another $100 million, bringing its total haul to $250 million as it prepares to expand internationally.  Last week, demand-response concern EnerNOC bought monitoring-based commissioning firm Cogent Energy, in a bid make 2010 its first full year of profitability. This week, Atheros parted with $113.6 million and 5 million in stock to scoop up powerline communications firm Intellon.

And it’s not just venture capitalists that have a vested interest in a vibrant smart grid space. The U.S. government primed the pump by awarding billions in stimulus funds to utilities and smart grid firms that will go toward research and development, staffing, ramping up production, and yes, smart meter rollouts. Unlike many funding efforts in the past, the government is making IT-backed accountability and transparency a priority, so you can be assured that many eyes will be watching for how every dime of stimulus funding is spent.

Will Bakersfield become a smart grid speed bump, or worse, a roadblock?  Not for smart utilities that learn from PG&E’s mistakes. Provided that they don’t underestimate their customers, and communicate and engage with them, utilities will find that they can go full speed ahead.

Question of the week

Should utilities slow down their smart meter roll-outs?
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