Distributed Energy and the Implications for the Home of the Future

On a frigid winter night in Texas, millions of residents found themselves plunged into darkness as the Texas Freeze laid bare the vulnerabilities of our legacy power distribution system. This catastrophic event, along with frequent power outages costing the U.S. economy between $20 billion and $70 billion each year, has underscored the urgent need for a new energy paradigm. As the grid becomes increasingly fragile and struggles to accommodate renewable energy generation, we are fast approaching a turning point that will see the end of baseload power generation as we know it, paving the way for a distributed energy network.
In this brave new world of distributed energy, homeowners will play a pivotal role in energy generation with rooftop solar panels and battery storage. This shift in responsibility presents an opportunity to empower homeowners, offering them greater control over how energy is produced and consumed. Our homes, once primarily serving as shelters, will be transformed into mini power stations responsible for powering our electronics, transportation, and connection to the outside world. The homebulding industry must adapt to this new paradigm. The home of tomorrow must have the performance and feature set to best take advantage of the distributed energy future. Le Corbusier, perhaps the most famous architect in the 20th century, once described the house as a “machine for living.” With the rise of distributed energy, perhaps we are finally able to achieve a quite literal version of Corbusier’s vision even he could not have imagined.

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The Origins and Challenges of Renewables in the Grid

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The origins of the modern distributed energy movement can be traced back to the Public Utility Regulatory Policies Act (PURPA) of 1978, and more specifically, to its overlooked Section 210. This section broke the utilities' monopoly over energy generation and opened the door for small renewable energy generation facilities. Since the enactment of PURPA, the United States has experienced a steady increa

se in the installed capacity of renewable energy, with residential rooftop solar emerging as the fastest-growing source of renewable energy in the country.
However, the integration of renewable energy into the traditional power grid has been fraught with challenges. Legacy power grids were designed for one-way power flow, and the growth of rooftop solar and home battery storage has introduced a bidirectional flow of power that can strain the system's components. As consumers use less power, utilities face shrinking opportunities to increase profits through the construction of baseload power plants. Furthermore, the periods of highest energy demand often coincide with lower renewable energy production, complicating the integration of variable power sources into the grid. Smart meters were implemented by the utilities to alleviate many of the issues posed by renewable energy. The implementation of smart meters provides an interesting insight into the mindset of the homeowner in regard to energy monitoring and management.

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In 2007, Xcel Energy, a regional utility company, embarked on an ambitious endeavor to establish the largest "smart grid" in Boulder, Colorado. This groundbreaking project aimed to provide individuals with a comprehensive understanding and control over their home energy consumption. Ideally, each resident would be able to monitor energy usage down to individual appliances and automate their operation to optimize usage during periods of low-cost or high renewable energy availability. While local government and residents initially embraced the project with enthusiasm, it soon encountered significant obstacles. A scarcity of IoT-connected devices on the market, costly investments in rapidly outdated technology, and general mismanagement led to the project's failure, ultimately leaving residents without the promised functionality. Homeowners quickly soured on the project and on smart meters in general as they were perceived less as a way to monitor and control ones usage and more as a scheme by the utilities to upcharge during periods of high usage. This story highlights a few interesting points. Homeowners are interested in monitoring their energy use if they can conveniently do something with the information. Smart metering without associated empowerment provides little value. In order to hand over control to the homeowner we must have a way to centrally control all of the devices in our home. Central control is difficult or nearly impossible if you rely on the manufacturers to integrate with one another. Finally it highlights the difficulty centralized utilities have selecting appropriate technologies and developing a distributed infrastructure.

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The Distributed Energy Home

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The reduction in solar panel costs, the introduction of residential battery systems, and the increasing fragility of the grid are setting the stage for the distributed energy revolution. As homeowners gain control over their home's energy, they will be confronted with the challenges of variable power generation. To position distributed generation as an asset rather than a liability, homes must be designed to work seamlessly with the benefits and challenges associated with intermittent power. By reducing energy consumption, implementing the next generation of smart meters, and providing homeowners with sophisticated, intuitive tools to manage their energy production and consumption, we can create a future where homes are more attuned to their newfound energy production capabilities.

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Solar power and battery backup technology are at a critical inflection point. Most solar and battery systems can supply a majority, but not all, of the energy a home produces. There remains a point of diminishing returns concerning total generation and storage capacity, making it impractical to completely disconnect a home from the grid. Although complete independence may not be the goal for most, there is an opportunity to make near-total independence an affordable reality for many homeowners. For instance, a typical home consumes around 900 kWh per month, and to offset almost all of its electricity, a roughly 7 kW solar system would be needed. In addition to solar production, the size and maximum output of the battery system must be tailored to meet the home's demands during periods of low or no energy generation. By increasing the efficiency of our homes, we can significantly reduce the size of distributed power systems, enabling even a modest system to provide most, if not all, of the power a home consumes. A passive house-rated home, which boasts superior insulation and air tightness compared to a typical house, can reduce energy usage by up to 70%. This reduction in consumption will be critical in the distributed energy future, allowing solar system sizes to be greatly reduced, less battery capacity to be required, and less total battery output needed, as the amount of draw at any one time will be much less. Until recently, the costs associated with passive house construction or off-grid energy generation systems have been prohibitive. However, when combined with other benefits such as resiliency during an outage, off-grid generation and passive house design begin to make financial sense.

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To maximize the potential of distributed energy systems, it is crucial to provide homeowners with easy-to-use tools for managing energy flows within the home. This necessity will force the industry to reconsider the concepts of smart meters and home automation systems. Home automation systems have long promised to simplify the homeowner experience, but these promises have largely remained unfulfilled. Complex, expensive automation systems often create more hassle than convenience, limiting widespread adoption. However, with the introduction of renewable home energy generation, automation becomes a necessity rather than a luxury. To achieve the greatest efficiency, a closed-loop energy generation and consumption ecosystem must manage the flow of power within the system. When energy generation surpasses consumption, excess flows must be directed somewhere. Automating processes in the home allows homeowners to better match consumption to generation, operating high-load appliances during the day and throttling usage during off-peak production. Homeowners should also have the ability to manage their system's performance. For example, some homeowners may prioritize resiliency, ensuring battery backups are always charged, while others may want to minimize grid reliance, depleting their battery before tapping into baseload power. These new requirements will give rise to home management systems that combine the (promised) functionality of smart metering systems with home automation technology. The complete home management system must evolve from legacy home automation, creating a holistic system that is intuitive to use and easy to service or upgrade.

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The distributed energy revolution is already underway and will serve as a wake-up call for homebuilders and home automation companies that have been slow to adapt to this new reality. Energy generation and storage, passive house design, and home automation are technologies that, taken alone, do not currently provide a reasonable return on investment. However, when combined, these three technologies will create a value proposition far greater than the sum of their parts. The industry must work to integrate these technologies while also developing an easy-to-use and well-supported interface. The era of a home merely serving as shelter is coming to an end; the home of the future will truly be a machine for living.

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In conclusion, the distributed energy revolution is upon us, and it is time for the housing industry to rise to the challenge. By creating homes that are efficient, sustainable, and equipped with the tools necessary to manage their energy production and consumption, we can empower homeowners and usher in a new era of energy independence. The home of the future will not only be a machine for living but a key driver of the sustainable, distributed energy revolution that will reshape our world.

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