Energy Management 101
Last updated 9/2/2021
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 dedicated to providing homeowners with more control over how and when they use electricity by designing new technology and products that combine to form energy management systems. In this section, we'll 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 guide 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?
While energy management can seem complex, at its core it's quite simple: a system designed to allow you to manage your energy usage. Importantly, 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! However, for a system to truly be considered an energy management system, it must consist 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 our other sections, 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.
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.
Why is energy management important?
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: 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 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.
In our next section, we'll explain the various components of energy management systems.