Utilities in the United States have run residential direct load control (DLC) programs as forms of demand management for many years, but the development of smart grid technology -- particularly advanced metering infrastructure (AMI) and smart, two-way communicating thermostats -- is enabling utilities globally to offer residential demand response programs.
In fact, Navigant predicts worldwide revenue from residential DR to grow from $332 million in 2014 to $2.3 billion in 2023.
"Advanced two-way thermostats are changing the business model for utility residential DR programs," said Brett Feldman, senior research analyst with Navigant Research. "The so-called 'bring your own thermostat' model, in which consumers purchase thermostats at retail stores, can vastly reduce the acquisition costs for programs and lead to greater customer satisfaction, since they are the parties choosing their own devices and initiating the participation process."
At the same time, residential DR will be an integral part of the development of a more resilient grid and the spread of microgrids -- trends that have gained increased urgency following recent extreme weather events -- allowing utilities to discreetly dispatch customers according to the load on the grid, and customers to control their own devices through mobile applications, giving them more control over their energy usage and spending, according to Navigant.
The advent of grid modernization is closely tied to these new approaches to designing the grid, according to the report. In the United States, residential plug-in electric vehicles are being examined as DR assets, and almost every domestic auto manufacturer has launched some sort of energy use optimization pilot, Navigant says.
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