Last updated 7/1/2021
As more and more states commit to clean energy targets or emission reduction goals, electrification–converting fossil-fuel-powered processes to be electric-powered–will become increasingly important. And once more of your appliances–and perhaps even your car!–are electrified, it will be important for you to have improved insight into your energy usage and a way to take control of it.
Solar and storage are not the only ways to take control of energy usage in your own home. In fact, there’s an entire new industry developing around providing just that, focused on home energy management systems. Home energy management, or, more simply, energy management, is a growing sector that provides people with a window into how, where, and when they use energy, as well as with the insights necessary to change that usage, reduce their electricity bills, and get the most out of their solar–and storage–installations.
Below, we cover what energy management is and why it’s so important for meeting clean energy and emission reduction targets. Already familiar with energy management or looking for an answer to a different question? In the rest of our energy management section you’ll find everything you need to know about the components of a home energy management system, the benefits of energy management, how to decide whether energy management products are right for you and, if so, how to evaluate your options.
What is energy management?
An energy management system consists of two key components: monitoring and controls. What good are energy usage insights if you can’t act on them? And, on the flip side, what good are levers to control usage if you can’t monitor their impact?
The first piece of a home energy management system is monitoring. Monitoring consists of all types of products that can track your energy usage, or consumption, whether it’s at the whole home level or at each individual outlet in your house. At its core, monitoring systems are all about visibility, giving you a window into the four questions of energy usage: how much are you using, which appliances are using the most, when are you using it, and how much are you spending on each appliance. As described in greater depth later, there are a number of different types of energy monitors that provide different levels of resolution into your energy consumption habits, which provide insight into your usage in either a mobile or desktop app.
If you’re a solar owner, you’ll also want to make sure you have a production tracking system to help you follow how much solar energy your panels are producing. Your installer will set you up with an app run by your solar inverter manufacturer, which can often be upgraded to include consumption tracking as well. Be sure to ask your installer if that’s a possibility with your setup.
However, consumption monitoring is only as useful as what you do with that visibility into your home: you need to have control to get the most out of monitoring. Controls are any type of system that allows you to not just see which appliances or circuits are using electricity, but to proactively change that usage. The simplest form of a control system is an electrical strip with an on-off switch: when you turn off an electrical strip, you are controlling the consumption of anything plugged in to that device. These days, controls are much smarter than a simple power switch on an electrical strip: different companies offer devices that allow you to control electricity at the circuit level or even at the individual plug level.
Importantly, home energy management systems are slightly different from energy efficiency upgrades: traditionally, energy efficiency programs could best be described as passive, while energy management is active. Energy efficiency measures focus on ways to reduce your energy consumption without changing your usage habits. For instance, if you replace an older, incandescent light bulb with an LED bulb instead, you’ll use significantly less electricity even if you keep the light on for exactly the same amount of time as you did before.
While energy management systems do often come with some passive savings (by noticing and shutting off vampire loads, for instance), they focus more on actions that you can take to manage how much energy you use and when. At the end of the day, both energy efficiency and home energy management systems will save you–and should probably be installed together to maximize your savings!
Why is energy management important?
Home energy management systems are a crucial component of the clean energy future: they’re effectively the final piece of the puzzle that helps home and business owners alike to integrate all of their different energy systems under one umbrella. By providing both insight into what you use in addition to the controls to actually act on those insights, energy management systems open the door to optimizing how you use electricity, where it comes from, and how much you’ll spend on it. Why this is so important requires a quick primer on the steps required to reach existing clean energy and emission reduction targets.
Climate-focused targets and goals require sector-wide energy transitions
Today’s clean energy and emission reduction targets have one primary aim: to power as many things as possible with zero-emitting clean energy technologies. From homes to businesses, from vehicles to trains, and from industrial processes to manufacturing lines, these targets hope to reduce carbon emissions across all sectors of the economy.
To do so requires electrification: the process of converting fossil-fuel powered processes into electric-powered ones. For instance, this could involve swapping out a natural gas (or oil or propane) heating system for an electric air source heat pump, or it could involve swapping your gasoline-powered internal combustion engine car for an electric vehicle.
Electrifying everything cleanly requires significantly more renewable energy
But electrification alone isn’t quite enough to reach clean energy and emission reduction targets: the electricity that powers everything will also need to be clean and zero-emitting. If we truly “electrify everything”, the increased demand for electricity from these additional sources will be significant, to say the least: a 2020 study from Cal Berkeley found that an aggressive electrification scenario would mean the US will require 90% more power than it did in 2018!
Meeting that additional demand for electricity will require a significant buildout of new power plants in the US, which is a great opportunity to deploy a greater volume of renewable energy resources on a very large scale. But distributed energy resources–like the solar panels you put on your roof–very much have a role to play too: by offsetting your electricity usage at the point of your demand (i.e., at your home or business), you can help reduce the potential stress on the grid that electrifying everything could cause.
Energy management offers the most efficient–and lowest cost–path to clean energy targets
And that’s where energy management comes into play: home energy management systems allow you to get the most out of your home’s energy usage, out of a solar panel installation and, most importantly, out of a battery. As discussed in greater depth below and in our “Benefits of energy management” section, energy management allows you to “right size” your solar and storage system, and allows any new renewable resources built to work smarter–not harder!–to meet the increased demand from electrifying everything.
What can you do with an energy management system?
There are four key benefits to having an energy management system at your home:
Receive actionable energy usage insights to help save money
The clearest benefit of home energy management systems is that they tell you which parts of your home are using the most electricity and when. There are two clear ways this can help save you money on your utility bills. First, by showing you which appliances are using the most electricity, you can get a better feel for how your habits influence the size of your electricity bill, or even if there are appliances that are using a lot of electricity when you’re not using them. Second, by telling you when you are using electricity, you can more closely tie the decision to run a dishwasher at 6 pm versus at 10 pm to what that costs from a bill perspective, especially if you live somewhere with time varying rates.
Right size your solar (and storage) installation
Energy management systems can help you right size both your solar and storage installations, meaning you only pay for what you need. Getting granular insights into how much electricity you use throughout the day allows solar installers to better design the right solar panel system for your needs. And by providing more flexibility with load control at a circuit level, an energy management system allows you to back up more of your home with a smaller energy storage solution. Given the cost of each incremental battery (often over $10K), only installing the battery system you need can be a huge cost saver.
Get the most out of your battery during an outage event
Because of that added flexibility of load control and battery system design, energy management systems help you to get the most out of your battery during a blackout or grid outage event. Today, most solar plus storage systems are installed with something called a critical load panel, which is basically a smaller electrical panel with fewer circuits on it than your main electrical panel, and that is backed up by your battery. Because the power rating and capacity of most single battery installations is lower than the power usage of a whole home (or even of certain appliances, like an HVAC), you need to choose which circuits your battery will backup at the time of installation.
If you install a battery with an energy management system–like a smart panel–though, the control you have over individual circuits means that you have additional flexibility over how to run your battery and over which parts of your home to backup. Instead of deciding today which appliances and rooms to backup with the battery for the next ten years, you can decide on the fly during an outage as your priorities change.
Receive tips for preventative maintenance on aging appliances
One under-appreciated beefit of energy management systems is their ability to alert you when your appliances are due for maintenance or replacement. This is actually a huge perk when thinking about the clean energy transition: most of the time, people only replace their appliances or HVAC unit when something goes wrong with it, meaning they don’t have the time to proactively research the best solutions and the newest tech on the market, or to proactively save to buy a slightly more expensive, but more efficient, option. Rather, people are forced to buy whatever is available to them right in that moment, and whatever a contractor can come out and install immediately, without the benefit of a thoughtful, comparative shopping process.
Ultimately, that impetus to replace appliances only when they fail, and not proactively, stalls the clean energy transition and may not lead to the best outcome for homeowners. But energy management systems can help avoid that eventuality: by tracking the electrical performance and energy usage of different appliances on different circuits, energy management systems can detect anomalous behavior early and alert you to the need to either get your appliance checked out or to start thinking about replacing it. Pretty cool, huh?
What are the components of an energy management system?
As described in greater detail in following articles in this section, there are a few main types of technology that form part–or all–of energy management systems:
- Consumption monitors–The first piece of energy management systems is monitoring, and that’s exactly what consumption monitors provide. There are many different types of consumption monitors and trackers that track consumption at either the whole home level, the circuit level, the appliance level or even at each individual socket.
- Smart breakers/circuits–The second piece of energy management systems is control, which sometimes happens in individual smart plugs but which more frequently happens at the circuit or breaker level. A smart circuit or breaker is one that you can remotely turn on and off, allowing flexibility and control over your usage.
- Monitoring apps–What good are insights and controls if you can’t access them or use them? Mobile and desktop apps are a huge piece of energy management systems, but each provide different levels of insight & control.
- Smart panels–In many cases, the technology that unifies all of the above are smart panels. They provide consumption tracking, smart circuits, and monitoring apps, providing a holistic energy management system all in one.
Again, the two keys to any energy management system are monitoring and controls. Without both of those aspects, it’s not truly an energy management system. The main difference between the different components of an energy management system listed above is where they are situated: are they downstream (i.e., at each individual outlet in your home), or are they a top-level setup (i.e., a smart panel that covers your whole home).