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Important Concepts:

  • Smart Meter
  • Time-of-Use Rates
  • Smart Appliances
  • Active Power Management

Power Management: Greater Control, Lower Cost

The long-term upward trend in the price of energy—plus the environmental costs of burning fossil fuels—have spurred the development of products and strategies for remote, real-time monitoring of home energy consumption. Tracking daily power use can help families reduce their energy consumption and save on monthly utility bills. When combined with smart appliances, saving money on home energy becomes even easier—and in regions where energy rates are high, it can quickly pay for itself. Making power management a part of smart home integration is a convenient and flexible way to increase awareness of energy consumption, save money, and reduce your carbon footprint.

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Time-of-Day Energy Pricing The time of day when energy is consumed has become increasingly important. In many parts of the US, utility companies are now installing smart meters which continually report energy consumption to the provider on a real-time basis (via radio frequency signals). This technology allows utility companies to save on costs by eliminating the monthly door-to-door meter reading ritual, and by closely tracking daily demand during peak hours. It also puts in place a monitoring system that will allow them to roll out graduated energy rates based on the time-of-day the energy is used.

Why is this important? Fossil fuel-based utility companies want to incentivize consumers to shift power-consuming activities that are not time-of-day critical (such as running washers, dryers, and dishwashers) to periods when power demand is lowest (typically overnight). This helps them to level out energy use throughout the day and night, reducing the use of expensive gas-fired auxiliary generators to meet peak demand.

To motivate residential and commercial customers to time-shift their discretionary power use to the wee hours of the night, utility companies employ a strategy that has worked for decades with industrial power users: offering the cheapest power rates overnight when the overall demand is lowest, and charging the most expensive rates during the wake-up and evening hours when consumer consumption is highest.

Smart Appliances (with built-in clocks to automate scheduling) make it much easier for consumers to time shift energy-hungry discretionary activities, and thus benefit from the lower overnight rates. Time-critical activities like making coffee, toasting bread and showering can still take place when they’re needed, but the power that is consumed will be charged at the higher peak time rates. For more information see Real-Life Energy Savings in the Insights section.