The Emergence of Demand Response Programs in HVAC
Thermostats are leading the charge as an economical response option for consumers
Demand response programs are helping savvy homeowners save energy, avoid brownouts and blackouts, and manage overall energy consumption.
These programs, which allow local energy and utility companies to make adjustments to a home’s temperature during peak-usage periods, create more efficient usage of whatever power is available.
At first glance, homeowners may be hesitant to turn over control of their thermostats to someone else, but the economic and environmental benefits are often worthwhile, and consumers retain a great level of control when needed.
HOW IT ALL WORKS
Manufacturers of all sizes across the spectrum of HVAC are getting involved with demand response, and they are participating because the technology within thermostats has made doing so relatively simple.
All of Honeywell’s Total Connect Comfort Wi-Fi offerings, along with the Lyric Round Second Generation and Lyric T5 and Lyric T6 Pro Wi-Fi thermostats, are enabled. Customers can opt-into the program through a utility-provided website.
“Demand response programs have improved as connected Wi-Fi thermostats have been increasingly adopted,” said Dave Crussel, product manager, Honeywell Connected Home. “The ability for customers to enroll through Honeywell’s connected thermostats allows utilities to have better control over the demand response events that are called.”
Nest has been involved with demand response since 2013, when the company began its efforts in California.
“From the beginning, it was always intended to leverage the technology for helping customers save money and energy,” said Jeff Hamel, head of energy partnerships, Nest Labs. “Then, of course, we aimed to parlay that into helping our utility partners do the same on a large scale. It’s been in our DNA from the start to help leverage the technology for customers and partners.”
Hamel said the state of the industry has been such that there are two types of technologies: The switch-based offering where the switch is directly on the compressor with a basic 50 percent cycling type of approach or thermostat-based demand response, where a temperature offset is performed. According to Hamel, if your set point is 72°F in the summertime, then maybe the utility will raise it up to 75° or 76° when an event starts and let a user run out the event at a higher setting.
“Because the Nest thermostat learns and builds a schedule for everybody based on occupancy patterns and preferences, we run a unique algorithm for every thermostat that is customized based on settings, preferences, and what is anticipated to happen,” Hamel said.
According to Eric Barger, CEO, Perfectly Green Corp., there were no models forecasting the amount of electronics and electricity required as the country evolved into the electronic world.
“Demand response programs from utility companies are vital components of the solution to this pervasive problem,” he said. “PGC believes demand response is destined to be a huge relief on the U.S. grid infrastructure in the future. So, to assist utility companies and at the same time help consumers, PGC developed a residential/light commercial product line that communicates with the grid and consumers through its patented blending software.”
Kevin Spaeth of Spaeth Inc. in Oklahoma City, an HVAC contractor familiar with Perfectly Green’s efforts, said “Demand response is currently controlled by shutting down or duty cycling loads first, and if that is not enough, then comfort is sacrificed and utilization is pushed to off-peak hours. That means, when you get home, you are going to be uncomfortable, and you must wait to do laundry or cook dinner. These programs don’t work. Enter Perfectly Green. Solar helps lower the demand, and if that isn’t enough on those 95°F days, the generator kicks in, and everyone is happy.”
While having this technology is a tremendous step forward, it is also essential for manufacturers to ensure consumers know demand response programs are available. Manufacturers have taken multiple approaches to get various consumers involved.
“Customer response has been strong for these programs as the utilities generally provide a bill credit for participation along with the overall efficiency and awareness of using less power,” said Crussel. “As demand response programs continue to become commonplace, we are excited to participate with the utility as well as engage our Honeywell customers, so they have the option to participate.”
Crussel added that these programs are generally very localized to the utilities’ service areas, so Honeywell engages connected consumers through digital marketing, contractor reach outs, and other demand generation efforts.
Hamel said traditional residential-based demand response has seen around 5 percent take rates in aggregate, but Nest has seen programs that offer 20, 30, and 40 percent opt-in rates.
“We are continuing to make the enrollment experience even easier and cleaner,” he said. “We have a multiple pronged approach to spreading the word about the program. In retail stores we put signs next to the actual thermostats on the shelf. Our Nest pros do a great job spreading the word about this, and we ask the utilities to help spread the word as well. We also reach out to customers through email and use our app to use that as a vehicle to notify customers of their eligibility.”
Barger said while seeking solutions, industrial and commercial customers find out about Perfectly Green’s offerings on the internet and inquire about point of use generation, micro power generation, and renewable energy.
“As far as residential HVAC contractors and their customers, some education is necessary as they begin to understand the challenges that utility companies and co-ops are faced with across the country,” he said. “The time to create ‘self-healing grids’ utilizing a combination of demand response, smart technology, and groundbreaking equipment, like the Smart Frog AC, is here.”
LOOKING TO THE FUTURE
The future of demand response programs appears bright. Manufacturers are increasingly taking steps to get involved, and consumers are becoming more aware that demand response programs exist.
“Saving our customers money, minimizing power usage, and having a positive impact on the environment are all part of our connected thermostat strategy,” said Crussel. “We look forward to partnering with more utility and demand response providers to include Honeywell’s compatible thermostats in their demand response programs.”
Similarly, Hamel said Nest has a lot of things planned regarding demand response.
“We are primarily focused on providing our utility partners more flexibility for using the app as an asset,” he said. “As our number of thermostats scale across the country, the ability for utilities to take advantage of those thermostats that are being sold and installed every day continues to go up. With the scale of the penetration of thermostats and the size of these programs, it’s really paramount that we continue to provide utility partners with flexibility to use the asset and aggregated resource to better fit into their stack of resources. That is something we are always working on. From customers’ perspectives, the experience will continue to be smooth, frictionless, and easy.”
Publication date: 8/21/2017