For over 100 years, electrons flowed in one direction: from the grid to the plug. This era is changing; across the country, in homes and businesses of all kinds, that one-way journey is already switching to a round-trip economic opportunity. In other words, we’re now witnessing the rise of the prosumer — that is, homes and businesses that are both producers and consumers of energy.
The question is, why now? It’s a combination of converging factors:
- High energy prices, for electricity and heating and transportation fuels, are causing consumers to rethink their energy use.
- Technological advances, such as dramatic cost declines in solar and batteries, and boom times for electric vehicles (EVs), are allowing for easier access.
- Unprecedented federal funding from the 2022 Inflation Reduction Act (IRA) is giving many low- to moderate-income Americans the equivalent of over $10,000 in “stimulus” checks and tax deductions, that can only be spent on home electrification and decarbonization.
Although each of these factors alone creates huge momentum toward electrification and “prosumerism,” the evolution needs to happen even faster. If the world is to stay on track for net-zero emissions by 2050, an essential climate goal, we have only eight years to cut emissions by nearly half.
Prosumer energy systems, which are designed to manage bidirectional energy, are an essential tool in the fight against climate change. They’re part of an arsenal of existing technologies that our modeling shows can cut residential emissions today by an average of 60% in retrofitted homes and 80% in new homes.
But the rise of the prosumer won’t happen automatically. The electrical manufacturing ecosystem has a key role to play in fast-tracking the rise of the prosumer. Here are two ways we can together accelerate change:
- Partner for progress.
- Level up customer engagement.
Partner for progress
The first major accelerant is to build partnerships among bidirectional energy stakeholders—EV manufacturers, electric utilities, electrical manufacturers, government regulators, and consumers.
Without question, prosumers present complexities of scale and regulation. We at Schneider Electric see the best route for achieving this rollout to be in partnerships. No one innovates or decarbonizes alone. And when you consider just how many organizations come into play here, partnerships are the only way forward.
A representative example of this comes from a new housing project in Menifee, California. Here, national home builder KB Home is building the future of the American neighborhood. Each of its 219 homes is zero energy-ready with rooftop solar, EV chargers, and battery storage.
The prosumer model doesn’t stop there. Every home’s battery interacts digitally with a central battery bank. This distributed system, in which individual batteries in each home work in concert with a central battery, makes this microgrid the first of its kind built in California.
With this system design, residents enjoy a more robust and flexible backup power supply. It also requires smaller batteries in individual homes. The distributed battery system is better equipped to power the community’s homes during opportune moments—peak grid demand or outages. Homes can also release a portion of their stored electricity back to the grid to earn money from the utility.
Now, consider how many partners were involved with this single project: KB Home, University of California, Irvine, U.S. Department of Energy SunPower Southern California Edison Kia, and Schneider Electric.
Private and public stakeholders alike still have work to do to incentivize adoption while harmonizing standards and regulations. Open standards are essential in fueling adoption and further innovation. For instance, these systems need to have open application programming interfaces (APIs) so that different players, say an EV charger manufacturer, an EV automaker, and an electric utility, can build together, not in isolation.
Level up customer engagement
Energy transitions have succeeded or failed not in the halls of Congress, but in kitchen-table conversations among everyday people. Although it’s easy to focus on the energy supply side—solar panels, wind turbines, and such—the demand side is where this next transition will be won or lost.
Simply put, utility customers want affordable and reliable energy but also energy flexibility and convenience on many levels. For this new level of customer engagement to happen, all energy stakeholders must figure out how to make prosumer technologies not just available but desirable to consumers. There’s more the industry can do aside from improving the economics of installing solar, battery storage and other key technologies.
Of course, the IRA goes a long way on that front. Customers have long felt disconnected from their energy use, and now, new tools are fundamentally changing this relationship. Products like the intelligent Wiser Energy™ home power monitor give users more personalized engagement, visibility and control over energy choices.
This level of customer engagement is especially important given that most energy customers have not yet launched their prosumer journey. We must come together as an industry to help them determine which actions make sense on an individualized basis to accelerate their own energy transition. Leveling up customer engagement makes the broader conversation about sustainable, intelligent homes more tangible and actionable, home by home and facility by facility.
When it comes to EVs, in the long run, it’s not range anxiety that will slow down the rise of the prosumer. The challenge today is more about charging infrastructure—and the electricians who install it. We need a lot more infrastructure and a lot more electricians ready to install it.
That’s what Qmerit is tackling right now. We have an at-scale distributed workforce management solution purpose-built specifically for installing EV chargers and related electrification technologies. What that means is we connect EV owners with the people who connect their vehicles to the grid. The result is a more seamless customer experience, and a chance for contractors to join the effort to electrify everything.
We also need more tools like EnergySage’s solar calculator to help consumers make better decisions about their own personal energy transition. With better information and cost projections like these, we can all “run our own race” to net zero.
Prosumers are driving the energy transition forward
We’ve already mentioned that the EV sector is a critical piece of the prosumer revolution. We’d also like to highlight a recent column by Annette Clayton, CEO of Schneider Electric North America, because it extends some of the ideas we explore here.
In the article, she talks about how to speed market adoption of EVs, a key prosumer technology. Many of the same principles apply, especially in improving the consumer experience. Top-down policies certainly play a role, but the only way we accelerate the rise of prosumers is to build genuine demand for the technological promise of bidirectional energy. And we need more partnerships and better customer experiences to make that possible. Check out Annette’s full Boston Herald op-ed, “Consumer experience key to driving EV success” to see her take. And if you’re curious about the consumer technology that will accelerate the residential prosumer movement, check out Schneider Home. This is the first platform that integrates EV charging, solar, battery backup, smart outlets and switches, and home automation—all controllable with an app.
About the Authors
Khaled Fakhuri and Tracy K. Price are the co-authors of this blog.
Khaled Fakhuri, Senior Vice President Marketing and Strategy for Innovation at Schneider Electric, is a strategic executive with a proven track record of leading regional and global teams in the energy, construction, real estate, and energy management industries. He is recognized for his extensive experience managing business unit P&L, digital transformation, sustainability, marketing, strategy, innovation, and technology M&A and integration.
Tracy K. Price is the founder and driving force behind Qmerit. He’s a serial entrepreneur whose vision for pairing technological innovation with standard process implementation has fostered growth and success at every company he has led. With more than 30 years in the energy industry, he created Qmerit to help accelerate the switch to electric vehicles (EVs) and other more sustainable and resilient electric-powered technologies.
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