This blog was co-authored by Enbala and the Rocky Mountain Institute (RMI). Enbala extends its heartfelt thanks to the Institute for the insights and effort that went into creating this piece.
Demand flexibility - allowing household devices like HVAC systems and smart appliances to interact with the electric grid in response to real-time price changes - can save customers money and lower the overall cost of electricity. The Rocky Mountain Institute's recent paper, The Economics of Demand Flexibility, analyzed the economics of making common household loads controllable and responsive to electricity price signals. The Institute found that just making two devices flexible, i.e., smart thermostats that could flex an HVAC system’s output up or down by 2 degrees and smart water heaters that could change the timing of water heating, could lower system-wide peak demand by eight percent and save $10–15 billion in costs to the grid annually.