27 percent of utilities are expecting to invest in behind the meter storage, according to the recently released Utility Dive “State of the Electric Utility” survey. 24 percent of utilities are already deploying behind the meter storage in pilot projects. 4 percent have already brought it into their core utility operations.

Yet despite the optimistic trend—which mirrors the projections of the industry analyst community—and the well-known value streams associated with behind-the-meter storage, there are still relatively few third-party studies that demonstrate, using data from systems installed in the field, how the value of distributed storage can be shared between the customer who hosts the storage on her premise, the distribution grid, and the wholesale market.

A new feasibility study released by Alectra Utilities and the Independent Electricity System Operator (IESO) in Ontario provides a powerful illustration to utilities and regulators of what distributed solar and storage can contribute to the electricity value chain when aggregated in concert as a virtual power plant across an entire service territory.

The feasibility study is based on research conducted by a group of stakeholders that included Alectra Utilities—the second largest municipal utility in North America—the IESO, Navigant, Sunverge Energy and others in conjunction with the Power.House pilot, a 20-home solar and storage deployment that launched in early 2016. The study defines the technical and market potential of residential solar and storage in the York region—a geographic area in southern Ontario that encompasses one million customers and nine municipalities. The study evaluated different elements associated with the widespread adoption of the Power.House offering, including the market potential for adoption, the associated value streams, the opportunity for non-wires alternatives, barriers and catalysts to adoption, costs and scalability considerations, and the value associated with services that the technology can offer. The study concludes that the deployment of solar and storage to 30,000 homes in the York region can create significant net economic benefits to the electricity system over a 20-year time horizon.

Alectra and the IESO quantified the economic benefits of an expanded Power.House program under two scenarios: a base case, reflecting current trends in system costs and electricity demand, and a deep-de-carbonization case, reflecting “higher levels of electricity demand sparked by aggressive policy and market driven electrification.” The 30,000 home figure is taken from the base case, which projects CAN$180 million in cumulative net benefits for Ontario over the lifetime of the program. The study defines cumulative net benefit as “the economic impact and resulting value to Ontario electricity customers as a whole reflecting both total costs and benefits, independent of who pays or who benefits from the deployment. This approach is consistent with the perspective used in supporting the [Ontario] Long-Term Energy Plan analyses.” Under the deep decarbonization scenario, Alectra and the IESO found that an expanded rollout of Power.House could create a cumulative net benefit of CAN$2.7 billion.

Power.House launched as a solar+storage offering that 20 single-family residential customers in Powerstream service territory subscribed to early last year (Powerstream went on to merge with Horizon and Enersource to become Alectra Utilities). For an upfront cost of CAN$3,500, plus a $20 payment per month over a 5-year period, customers received a 5 kW solar array with a 6.8 kW/11.4kWh Sunverge One system. Alectra promised customers that bill savings over the first five years would pay off the upfront cost of the system—if they don’t, Alectra will make up the difference. Alectra placed these customers on a TOU/NEM tariff, and Sunverge’s software—which runs both on premise and in the cloud—managed stored solar energy on the customers’ behalf to maximize their economic outcome. The initial deployment was successful: the pilot was oversubscribed, thanks to Alectra’s marketing efforts, and average customer bill savings between May-July 2016 totaled $142/month.

The feasibility study began once the Power.House pilot was off the ground. One of the first steps was to analyze the technical and market potential of similar solar and storage offerings. The study considered technical eligibility factors for solar, such as roof space and shading, as well as customer eligibility factors, such as internet connectivity, residential load profiles, and whether homes are rented or owned. They also conducted power flow modeling on their distribution network to estimate what penetrations of DER could be sustained while maintaining reliability. Finally, they developed two different solar+storage offerings: one for large homes (5 KW solar / 11.6 kWh storage), and one for small homes (3 kW of solar / 7.7 kWh storage). Although the large home offering had a higher upfront cost, the study found that it yielded a faster payback.

Alectra also evaluated whether the virtual power plant could serve as a meaningful alternative to transmission and distribution infrastructure. They evaluated two substations, and found that it makes economic sense to defer upgrades on one substation in the York region for two years, generating an estimated savings of $12 million (2016).

To analyze the value that solar and storage could contribute to system reliability, the IESO, Navigant, and Sunverge collaborated to develop an optimal dispatch profile for the aggregated solar and storage resources. According to the study, “the team used a combination of historical and simulated market data to develop an optimized hourly system dispatch profile for a given reference year. This dispatch profile was seen as the reference profile to maximize the value generated by the system both from a customer and market revenue perspective.” This calculus also encompassed the customer value stream, in which the Sunverge software manages the home load, solar, and storage in real time in order to maximize the economic benefit for homeowners on the TOU/NEM tariff. The testing of these dispatch profiles was conducted on a subset of the fleet deployed in the Power.House pilot. The image below shows the responses of individual units within a VPP operating against a plan of prioritized use cases, including regulation (8-10 hours per day), demand response, operating reserves, peak reduction for deferral, and end of day PV ramping.

The study underscores Sunverge’s original mission: Distributed energy storage and solar, when aggregated into a large–scale, software-managed virtual power plant, serve as a meaningful alternative to traditional forms of generation and infrastructure.

If we needed a wake-up call that we require a more reliable and resilient electric grid in the US, one that’s restructured around distributed generation and robust storage, we got it last Friday.

In New York, the power failed at a single subway station in Manhattan at 7:20 in the morning, creating cascading delays that turned ordinary commutes into ordeals of two to three hours.

While that was disruptive for thousands of commuters, it was nothing compared to what happened across the continent, where 90,000 PG&E customers in San Francisco were without power for as long as seven hours.

The outage began at the very start of the workday, when a fire affected a lone distribution substation downtown. From there, much of the city’s financial district lost power, along with several other busy neighborhoods and transportation corridors. There was gridlock as traffic lights were unable to function, commuters stranded with no power for the subway or electric buses, elevators unable to bring people to their offices.

But that was just the most visible part of the failure. Plenty of other vital infrastructure failed behind the scenes. Businesses couldn’t process credit card payments, which for most retailers and restaurants meant a total loss of business for the day (even those with cash couldn’t open register drawers). ATMs didn’t work. Neither did keycards in offices or hotels, locking people out, or elevators (firefighters respond to about 30 calls for people trapped in elevators). Without computer servers, even those who got to work couldn’t do any.

“Big Lesson: backup generators,” San Francisco Mayor Ed Lee told a press conference – but some of those failed, including one in a large hotel. Even hospitals that had redundant backup generators cancelled non-emergency surgeries.

It was a beautiful, sunny day in San Francisco. Besides that making it a little more bearable for people stuck downtown, it also made it an ideal day to have had distributed solar generation to keep the trains moving, the servers up and businesses functioning. It would have been even better if the solar generation had been connected to distributed storage, especially if the outage had lasted another few hours into darkness.

Energy experts and federal regulators alike have been talking for years about the growing fragility of the US grid, and the enormous cost to the economy of the rapidly increasing instance of failures. The American Society of Civil Engineers, in its 2017 Infrastructure Report Card, gives the energy system a dismal D+ grade, and points out that “[m]ost electric transmission and distribution lines were constructed in the 1950s and 1960s with a 50-year life expectancy,” with the grid at full capacity.

So while many power failures are caused by the stresses of severe weather, system age and lack of extra capacity are major contributors to the 3,500+ power interruptions in the nation every year. It’s going to take many years, and a great deal of investment, to modernize those resources.

Fortunately, there are some cities, including Los Angeles and Portland, along with some smaller communities in Vermont, that are taking action now. Rather than large generators, they are putting distributed storage online to act as a UPS for critical public items like traffic signals and firehouse garage doors. This is a vital extension of the use of DERs, including storage, in residential and commercial buildings, and also can help relieve some of the capacity issues inherent in the aging grid.

We’re going to have more outages as utilities work to upgrade infrastructure. Distributed storage can help dramatically reduce the effects of these interruptions, both in terms of inconvenience and economic impacts.

It probably took longer for Audrey Zibelman to get from New York to Australia than it did for her to make her mark on the Australian energy industry.

Having left her position as the head of the New York Public Service Commission to become chief executive of the Australian Energy Market Operator, Zibelman told utility executives that Australia’s energy future lies in a modernized system that is highly flexible in real time. That modern system will depend on the addition of distributed generation on a mass scale, a two-way grid, and the incorporation of intelligence throughout.

When it comes to doing that, she said, it’s clear that Australia is ahead of the rest of the world. It’s great to see Australia setting the pace – it’s one of Sunverge’s largest markets and home to the world’s largest residential virtual power plant thanks to AGL. We’re also proud that our storage systems were there to provide backup power to homeowners in Queensland during the recent Cyclone Debbie.

What’s disappointing is that the U.S. is not right up there with Australia. The nation that has been the home of innovative technology should also be a world leader in energy network modernization.

Zibelman is absolutely right that the traditional grid, with its over-reliance on central generation, is no longer adequate in the 21st century. Its lack of resiliency is a matter of not just economics, but even life and death in an age where everyday life depends on reliable power and stops without it.

Zibelman saw those effects firsthand in the aftermath of Hurricane Sandy (as she reminded her new constituents in a speech in Adelaide). Australia itself has just lived through widespread blackouts in the middle of a blistering summer, as demand overtaxed its system’s ability to deliver enough power – so they understand the problem well. It’s only a matter of time before the next major weather event in the U.S. sweeps through a densely populated area and leaves millions without power, cell phone service and other vital resources for hours, days or even weeks.

The longer the US waits to modernize its grid and prioritize the deployment of distributed resources, the more the country remains at risk for another Sandy catastrophe. Reinforcing our existing capabilities through broad adoption of distributed generation and storage, combined with intelligence, is the future. This bolstering of resources at the edge of the system will provide the resiliency consumers demand, and that utilities need to provide, in a way that’s not possible with central generation alone.

Utilities around the country realize this. Utility Dive’s 2017 State of the Electric Utility survey found that more than 70% of the 600 utility executives surveyed expect moderate-to-significant growth in rooftop solar, demand-side management and behind-the-meter storage. To facilitate the interconnection and control of those resources, more than 80% said they expect to see growth in grid communication technologies. And 90% of respondents believe their company should have a DER business model, with over half indicating they should pursue rate-based investments in distributed resources.

We’ve seen this decentralization create innovation in other areas, like the “Internet of Things.” That innovation, in fact, decentralized intelligence into ordinary household devices that help make increased energy resiliency possible. In fact, the modernized grid mirrors today’s IT infrastructure, with its cloud-based processing power connected to and supporting the individual processing power and intelligence of smart, distributed devices from laptops to light bulbs.  

The technology is there. The model is there in Australia. The understanding of the need is there. The longer the US delays the inevitable, the higher the risk; it’s time to put the regulations, resources and capital in place to move much faster.

As residential energy storage systems using lithium-ion batteries have begun to proliferate, it’s natural that people would seek to better understand the safety features built into these systems. With this increasing focus on safety and recent headlines around the issue, it’s important for both users and regulators to have the information necessary to put individual reports into context.

Safety is something that manufactures like Sunverge have considered since the beginning. In fact, Sunverge was born out of decades long experience supplying into the North American utility industry.  Our products are designed as “network grade” with safety and reliability at their core. As residential and commercial battery storage becomes widespread, Sunverge fully supports the definition and evolution of a set of safety standards to guide existing players and new entrants in this important energy market.

At the same time, safety standards should be based on data and testing, which is what we believe should be the case for guidelines being drafted by Standards Australia.

As proposed, storage units in Australia would be permitted only in separate external enclosures, not in homes or garages. In spite of the fact that there are no current proposed rules concerning the parking of Electric Vehicles powered by Lithium-Ion batteries in garages.

We understand the concerns and that customers demand and deserve assurances of safety. That’s why Sunverge engaged in extensive fire safety testing last September, conducted as part of the effort by the New York City Fire Department (FDNY) to develop standards for storage installations indoors in homes in the city.

The results showed that our systems excelled when exposed to the most extreme conditions – in fact, the report concluded the overall design of the Sunverge One (formerly the Sunverge Solar Integration System) “appears to contain or isolate” the potential hazards of advanced lithium batteries. In addition, the report indicated the Sunverge One “demonstrated that a properly designed system may be highly manageable and does not pose additional undue risk to first responders or surrounding properties during extreme fire conditions”.

At the same time, we’ve designed our systems to be installed and operated safely both inside and outside buildings, typically mounted on a seismic pad and in a robust containment system, so consumers can choose what’s best for them, whether for convenience of location or any other reason.

Similar concerns were raised in the past, for example, the installation of diesel generators by homeowners. As standards bodies looked at the data from tests and the efforts of manufacturers to put safety at the forefront, they were able to create fact-based guidelines that have served consumers well.

Finally, as Australia looks for guidance, we are ready to help. The Sunverge One meets or exceeds all applicable industry and independent standards (including AS, IEC, UL, ANSI, IEEE, NFPA, ACMA and FCC). Our systems analyze more than 800 data points every 15 seconds and automatically adjusts to ideal parameters. The batteries we use in our hardware have an outstanding track record for safety having been originally developed for marine and defense applications. So we stand behind the safety of our products. In fact, several Sunverge employees and partners have Sunverge units installed at their homes. We are pleased to share our knowledge and experience with Standards Australia.

A journalist recently asked me to predict what’s in store for distributed storage in 2017. I thought I would share my predictions with other distributed energy experts. I welcome your thoughts and feedback.

Fortunately for Sunverge and other distributed storage companies, all signs indicate storage will continue its upward growth trend in 2017, with three significant factors at work.

The first is basic economics. The penetration of centralized and distributed solar power will continue to grow. A survey from the Pew Research Center shows overwhelming support for solar power overall in the U.S., with 40% of homeowners considering rooftop installations (to save money and protect the environment). Adding storage to distributed solar immediately increases the ROI on the system by dramatically shortening the payback period. The increase in EV sales will contribute, driving down the cost of batteries (through volume and innovation) while driving up demand for storage to make recharging more efficient; Bloomberg New Energy Finance projects that 35% of all new vehicles sold worldwide in 2040 will be electric. This is in line with overall predictions for growth in renewable energy of all kinds: The U.S. Bureau of Labor Statistics predicts the fastest growing jobs between now and 2024 will be for wind turbine service technicians, at more than $50,000 annual salary.

Demand for storage will also be driven by continuing changes in net-energy-metering tariffs, along with the addition of demand charges by many utilities (and, eventually, time-of-use rates). There are 13 U.S. states now considering new distributed generation rate designs, including time-of-use and demand charges, while in Australia eliminating its feed-in-tariff has been forecast to lead to 50% penetration of storage with rooftop solar – and there are already 1.6 million rooftop solar installations “down under”. This will create increased demand, not simply for behind-the-meter storage, but for that storage to be ever-more intelligent, with predictive analytics that enable rooftop solar and EV owners to automatically get the greatest possible benefit from their system – and to help utilities manage the complexities of putting so much local generation onto already taxed grids.

Finally, more policy makers around the world are recognizing the value of widespread local solar and storage and strongly encouraging its deployment – Canada, Australia, New Zealand and Japan, in particular, are world leaders, along with the U.S. Even though it appears likely the Trump administration won’t have as strong a pro-renewables energy policy as there has been under President Obama, there remain strong pro-renewables policies in forward-looking states and their governors in Oregon, Massachusetts, New York, New Mexico, Washington, Hawaii and California. It’s not only current governors taking a stand, either: One of the strongest pro-renewable messages comes from former California Gov. Arnold Schwarzenegger, in a forceful and direct statement about why California has been in the lead on this issue for years.

All of these are bellwether states when it comes to energy policy in the U.S., and with respected leaders of both parties agreeing on the need to continue down the renewables path, the outlook for distributed storage remains positive and strong. I am looking forward to continuing the exciting work we’re doing with both current and new customers in 2017.

A recent Moody’s report on the projected growth of electric vehicles in California outlines a significant issue faced by utilities across the country: How to accommodate the increased demand created by EVs while also meeting steep targets for renewable generation and emissions reduction.

Transportation has become the largest source of greenhouse gas emissions in the US, pulling ahead of the power sector this year. Reducing those emissions by promoting the use of EVs is a national priority – and as a result, EV sales are increasing exponentially. California alone could have more than a million EVs registered there by 2025, according to Moody’s projections, while other forecasts predict there will be four million of them on the road across the US by 2024.

This creates an enormous shift in energy sourcing from gasoline to electricity. In addition to home charging or connections at parking garages or businesses, public charging stations have already begun to supplement gas stations around the country. Owners of BMW’s i3 EV can purchase access to a nationwide system of charging stations. The Federal Highway Administration just announced it will create a national network of “alternative fuel” corridors across 35 states, including charging stations from coast to coast.

Utilities will have to be prepared to absorb this shift in demand. And it’s a lot. In California, EVs will account for as much as two-thirds of load growth for the state’s utilities by 2030. Other states that have significant EV registrations today – Florida, Georgia, New York, Texas, Washington top the list – are facing a similar shift.

It’s going to be very difficult to generate enough energy from renewable sources to meet this demand. That puts utilities in a tight spot: The American Public Power Association noted that could force some utilities to increase their use of coal-fired generation. So the effort to reduce emissions from transportation would just shift those emissions back to the power sector.

That’s not a great place for utilities to be.

Part of the answer, of course, is to greatly increase the rooftop solar capacity installed on residential and commercial buildings. Since most EV charging happens when the vehicles are parked at home or at work, it makes sense to increase the availability of renewable energy at the charging station to reduce demand on the grid.

But solar alone can’t solve the problem. The only way we can is to make much more efficient use of that renewable generation by combining it with intelligent behind-the-meter storage.

First, storage will make it possible to capture all the solar being generated, and then use it to charge the EV after dark. Second, the ability to aggregate stored energy creates a more flexible system that can direct extra power to “fast” charging systems that can fill an EV in a relatively short time, or otherwise shift available energy around the grid.

It’s going to require intelligence and automation to get the most efficiency out of either approach. Figuring out the ideal time to charge storage or tap into it, or to switch the EV recharge on or off dynamically based on overall demand, isn’t suited to a manual process. That’s a job for apps and analytics (and it also creates a service that utilities can offer to EV owners, creating a new revenue stream).

Meeting the rapid increase in demand from EVs is a challenge for many of the largest utilities in the country. It’s inevitable. And it can be met with the right technology and planning.

With the rapid growth of EVs, embracing energy storage in an intelligent way can help utilities address the issue now. If you want a detailed explanation – read this whitepaper.

Last year, Sunverge Energy donated more than $80,000 in equipment to the Bloomington-based nonprofit Bloominglabs, the first makerspace (aka “hackerspace”) founded in Indiana.

This year, Bloominglabs is putting some of that equipment to use, bringing 16 of the donated AG150 computers to the Student Cluster Competition at the annual SuperComputing Conference (the high-performance computing community’s biggest gathering.)  The students at the SCC, hailing from universities around the globe, come together each year in small teams. Each team is tasked with creating a small cluster on the exhibit floor, racing to complete various challenges over the course of 48 hours.

Sunverge’s donated AG150s will be used as file servers – one for each of the 14 teams.  Two additional AG150s will provide infrastructure for the competition, acting as NFS mountable file systems.  If the trial at the competition is a success, Bloominglabs and the SCC plan on using the AG150s again for next year’s competition, providing ongoing support for this wonderful community.  Sunverge is proud to be a part of shaping the next generation of information technologists through Bloominglabs and the SCC!

If you’re interested in learning more about the Sunverge donation, please contact Bloominglabs at contact@bloominglabs.org

I was intrigued reading this recent Motley Fool article examining the potential of Tesla creating a Silicon Valley-style “two-sided market” in the solar+storage space. These markets are common in technology, where a company develops proprietary technology (say, a smartphone) that benefits consumers and also turns those consumers into a ready market for other companies (think app developers). This network effect tends to amplify itself and drive high growth and increasing value for all three parties.

I would argue that there already is a two-sided market in DER – one Sunverge has been building since we started. Consumers value the added reliability storage gives them, along with the opportunity to lower their bills. Utilities value the opportunity to establish a new relationship with consumers as well as help meet increasingly stringent reliability and renewable energy requirements.

As this two-sided market evolves it will create more opportunities to involve more participants. Not only will consumers and utilities derive more benefit from the increased deployment of storage, but there will be more connections inside the home (a new generation of home automation devices and smart appliances) as well as outside (independent aggregators of stored power, power marketers).

All of this depends entirely on us developing and deploying the advanced intelligence needed to manage the complex interactions that will extend from the individual appliance all the way back to power generation and transmission. The focal point of that intelligence will migrate from the home, where most of it is today, to a centralized platform in the cloud. In Silicon Valley speak, the value is moving “up the stack.”

Let me give you an idea of what things might look like after a decade or so of this evolution, and why the platform in the cloud is so vital.

First, you can expect large numbers of homeowners, small businesses and local governments will be generating their own power, whether using rooftop solar or wind turbines. The increased efficiency of these sources means there will be a lot more power created each day, so there will be more (and more efficient) storage installed to capture that power for when it is needed. In fact, by 2024, Bloomberg New Energy Finance estimates two-thirds of all energy storage, on a cumulative basis, will be behind the meter.

Second, home automation devices, appliances and home systems like heating and cooling are going to get individually a lot smarter and more efficient. Homes are going to use less power even though they will have more things in them that need power (growth in electric demand is already flattening).

With increased storage and better efficiency, large numbers of consumers will buy a lot less electricity from the local utility. On the contrary, whatever they don’t need for themselves they will sell or trade on the open market and deliver through the grid. Various bidders will exist for that power, from other individuals to utilities to brokers who will aggregate individual distributed sources into a larger virtual power plant.

This is why the boom in storage is “set to transform the relationship between consumers and utilities,” in Bloomberg’s words. That transformation will be driven by software.

In fact, it’s only possible with greatly increased levels of intelligence, because you’ve got a lot more decisions to make about energy. It’s not about turning off the lights when you leave the room. Now you have to correlate all the different power using devices in the house and make them work as efficiently as you can – but, presumably, without taking cold showers in the morning or trying to cook dinner in the dark. Now, what to do if you need to have a full charge in your EV by 5 am on Tuesdays, instead of at 8 am the rest of the week?

Solving those problems are going to take some artificial intelligence that ties all your home data together, figures out your usage patterns (are you erratic or predictable, constant or peaky?), correlates them with things like the cost of grid power, the weather forecast, and the sunshine levels for the day, and then filters that through a set of parameters the consumer chooses. At that point, the software can manage usage accordingly, and come up with a battery management model that matches.

Those are not simple problems, but there’s another layer of complexity entirely when you start deciding when should you sell your stored power, to whom, and at what price. Keeping track of pricing that is changing by the moment, engaging in a dynamic bidding process, and the logistics of aggregation require more, and more centralized, intelligence.

So while each of those participants will offer their own piece of “intelligence,” they also need a single place to connect, amplify that intelligence, and have access to the network effects that drive value. The solution is a cloud-based platform that is able to set and maintain the standards for those connections and coordination, provide vital shared data, coordinate decision making among all the participants, and ultimately manage the movement of the power onto the grid.

In concept, it’s a much larger version of the “meta hubs” for home energy management I recently wrote about. You need this system to coordinate everything, streamlining and simplifying the process. You also need such a system to open the way for innovation, just as we’ve seen with mobile apps or cloud-based IT services.

This is where we’re focusing our efforts and positioning ourselves to build this multi-sided energy market and grid of the future. It’s the logical extension of the strategy behind our business from the beginning – and one that is accelerating along with the evolution of everything from storage technology to utility business models.

We’re rapidly getting to an exciting, efficient and highly intelligent energy future. I’m excited not only by what life will be like then, but by the opportunities it will create for new ideas and new services.

Apple’s App Store changed the marketplace for applications by creating a revenue-sharing model that gave even the smallest developer a potential marketplace of millions.

What if Apple did the same thing for energy and created a store where you could sell some of your home’s solar power when it was in highest demand?

That’s a distinct possibility, as this article in The New York Times suggests, and it would represent the natural evolution of today’s Net Energy Metering (NEM) models. With legacy NEM programs disappearing in many places, we could instead see the development of a new marketplace for power. Truly intelligent storage that is both integrated with utilities and capable of being aggregated into a virtual power plant (VPP) is the key to providing value for the next-generation grid.

Apple has received a wholesale energy designation from FERC, making the company’s energy arm, in effect, a utility able to sell power to wholesale customers. Right now, the main customer for the power it is creating from new solar farms is Apple – no surprise, given the power it takes to run the mega-scale servers that drive the App Store. But there’s no reason Apple couldn’t market power to other customers in the future – including selling power obtained from storage systems that can be linked into VPPs on a scale that makes sense from a wholesale perspective.

At the same time, Apple is moving aggressively into smart home management with its HomeKit, one of a growing number of “meta-hubs” that are largely focused on managing home energy. These hubs can control lighting, heating, cooling, and various appliances plugged into smart outlets, as well as monitor the energy used by each device. So it’s fairly easy to automate the process of demand management in the home on a micro level.

Put all this together, and you start to see a pretty sophisticated system that would make it possible for almost any homeowner with DER and storage to turn their renewable energy system into a revenue stream. The “iEnergy Store” would buy the excess power (as happens today with NEM), but as part of a VPP that would aggregate enough energy to be readily resalable. The resale revenue would be split between the aggregator and the homeowner.

Meantime, the home automation system is managing each of devices and smart home systems to maximize the power available for sale (while still letting the homeowner set key parameters).

Think about what would be possible if a model like this became widespread. There would be competitive wholesalers like Apple out there (like there are competing app marketplaces) willing to bid to be the aggregator of the power available from your storage. Software platforms would conduct the bidding and lock in the best offer for your individual situation. The grid operator would earn revenue. All this would happen without homeowners doing anything, or worrying about anything except the monthly payment from the aggregator.

As The Wall Street Journal’s Christopher Mims observes in his recent column, services are what consumers (and businesses) really want delivered via the cloud. He calls services the “killer app of the Internet of Things” and that extends to the future of the grid. It will transform from a way to push electricity down a wire into a network that ties together in-home devices, DERs, and traditional generation with a wide range of services for users (who also become suppliers).

We’re no longer talking just about storage delivering reliability and cost savings for individual homeowners, but how storage and intelligence will fundamentally rewrite the rules for the electric power marketplace.