As more homes are electrified, utility circuits could face major upgrade costs. Or smart panels and controls could help save the day, a new study says.

18 July 2022 – Published by Canary Media

By Jeff St. John

Utilities are worried that homes switching to electric heating, electric cooking and electric-vehicle charging will create major new strains on their power grids. And homeowners looking to go all-electric face steep costs if they need to upgrade their grid connections to handle bigger electrical loads. A new report suggests that both problems could be addressed by the latest smart electric panels.

In many cases, these panels can keep homes’ electricity consumption low enough to avoid the need for grid updates, according to the report from pro-electrification nonprofit Rewiring America, based on data from thousands of homes equipped with smart panels made by San Francisco–based startup Span.

Span’s smart electric panels cost about $3,500, quite a bit more than the average of $1,000 to $2,500 for the standard electromechanical panels used in almost every electrified home and building in the world. But the kind of load-shifting capabilities they provide could defer the even greater costs of upgrading power grids to serve all-electric homes — a fact that could encourage utilities and their regulators to look for ways to shoulder some of the costs of the panels as an alternative.

An electrician installing a Span smart electric panel.
An electrician installing a Span smart electric panel. Smart panels and other devices can balance large home electrical loads to avoid overloading utility grids. (Span)

It’s expensive and inefficient for a utility to upgrade” the grid every time a customer wants to add an EV charger or electric appliance, Span CEO Arch Rao said in an interview. “We think there’s a much more economic and faster solve: upgrading the panel at the edge of the grid.”

Span panels are among a class of smart-home devices that can turn EV chargers, electric heat pumps, water heaters, dryers and other hefty household loads on and off to ensure they’re not all drawing power from the grid at once.

That relatively simple intervention can keep a home’s peak load below the limits that might require the utility to do a service upgrade. These can take months to complete and cost anywhere from a few thousand to tens of thousands of dollars, with much of the expense borne by the homeowner and some by the utility, depending on local regulations. The need for such upgrades is a potential deal-killer for home electrification projects. And if enough homes stay below those limits, then utilities could avoid upgrading their transformers to meet increased electricity demand.

There have been studies in the past talking about the potential doubling and tripling of electricity demand due to increased electrification,” Rao said. Getting households to switch their heating, cooking and transportation from fossil fuels to electricity will be an essential part of decarbonizing the U.S. economy, experts say. But if all homes in the U.S. needed a $5,000 service upgrade to make that possible, total costs for those upgrades could approach $250 billion, Rewiring America estimates. Technologies that can help avoid those service upgrades will be critical.

How smart tech can balance homes with the grid

To test the thesis that smart panels can make it possible to avoid upgrades, Span analyzed data from thousands of its customers’ homes across all major U.S. climate zones. The company’s remote-controllable panels collect data at the second-by-second level for all major circuits, providing “really high temporal resolution” of how homeowners use their appliances and “how close they are to the threshold of capacity,” Rao said.

The data indicated that total household electrical loads rarely combined in ways that pushed total grid demand over 80 amps, and that such “peak events” lasted an average of only 12 minutes. Many older single-family homes in the U.S. have 100-amp thresholds. So there’s plenty of wiggle room to halt EV charging, water heating or other power demands that don’t require constant, steady power.

The chart below shows how one real-world Span-equipped home could be kept under that threshold simply by postponing EV charging when other household loads are spiking.

Chart of home electric load before and after shifting EV charging

The left graph is a real-world evening peak event caused by operating an EV charger, heat pump, water heater and clothes dryer. The right graph shows how that peak could be held below 80 amps by shifting 34 minutes of EV charging. (Span/Rewiring America)

“We’re able to do that, without any inconvenience to customers, just by shifting one major appliance,” Rao said. ”Shifting the EV charger, shifting the water heater [or] changing the set point on the air conditioning. That’s all it takes.”

The 80-amp ceiling is ”a conservative threshold,” Rao said. It’s also well below the 200-amp service that Span’s panels support. A report last year from the Austin, Texas–based nonprofit research organization Pecan Street estimated that about 48 million U.S. single-family homes have 100-amp service that might require upgrading to support electric heating, cooking and EV charging.

Pecan Street estimates that these electrical panel upgrades can cost between $1,000 and $5,000 and take several weeks to complete. Contractors in different parts of the country have cited higher upgrade costs and longer wait times, depending on the scope of the project and market demand for electricians and equipment.

Span has largely served higher-end customers installing rooftop solar, backup batteries and EV chargers, but it’s also participating in projects aimed at providing resilience to churches and community centers. Whatever the setting might be, Span’s panels could help projects avoid the need for utility service upgrades.

Rewiring America has proposed federal legislation to provide incentives for electrical panel upgrades as well as for electric appliances. Without incentives, upgrade costs and delays could prevent homeowners from making the switch to electric when appliances break down and need replacement.

Homeowners are often ”confronted with these questions at very inopportune times,” Rewiring America CEO Ari Matusiak said — typically when their appliances break down and need to be replaced. ”It’s not an acceptable answer to say, ‘You’re going to have to wait three weeks for an electrician to upgrade your breaker box before you can take a hot shower.’”

But Span’s data indicates that homes with 100-amp or 150-amp electrical service could manage additional electrical loads to keep their peak grid draws well within limits. Policymakers need to be ”thinking about the breaker box and the wiring and outlets as part of our overall climate infrastructure,” Matusiak said. ”How do you transform the market such that the default is the efficient electric machine being the most affordable and convenient to purchase and install?”

Span, which has raised $134 million since its 2018 founding, isn’t the only company providing technology that can manage home electrical loads. Similar products are available in different configurations from global panel makers Schneider Electric and Eaton and startups such as Lumin, Koben and Atom Power. Simpler circuit-switching devices from companies including NeoCharge, SimpleSwitch and Splitvolt are designed to prevent two major loads, such as an EV charger and an electric dryer, from operating at the same time.

The technology is here. How can utilities use it?

Whether or not utilities can rely on such customer-owned devices to prevent potential overloads on the grids they’re responsible for is another question. But a small yet growing number of utility pilot projects are exploring the potential.

“Not having to upgrade is huge, not just for the homeowner but for the utility,” said Anna Demeo, CTO of Savant Systems, a home automation vendor that’s branched out into smart electrical panel systems through its Savant Power subsidiary. The company’s systems are being tested by a number of utilities, including Florida Power & Light at the solar-powered showcase Babcock Ranch residential development, she said.

The electrical codes that contractors and electricians must follow when installing EV chargers, electric ranges and other heavy power users are also being adapted to support these kinds of technologies, she said.

The latest version of the National Electrical Code allows ”automatic load management systems” for EV chargers that would otherwise exceed a home’s electrical limits, Demeo pointed out. It’s expected that upcoming versions of the code planned for release in 2023will be ”targeted not just toward EVs, but all-electric homes,” she said, with regulations that could allow automated management of multiple types of electric appliances. Such automated management systems could include smart electrical panels.

As codes evolve to support smart-home power controls, utilities will have more leeway to integrate such controls into the interconnection rules that govern the interaction of homes with the grid, Rao said.

At the same time, Span is working with a handful of utilities interested in how they can use its smart panels, including California community choice aggregator Silicon Valley Clean Energy and Vermont utility Green Mountain Power.

Green Mountain Power, which has received permission from its state regulator to lease batteries, smart water heaters and other remote-controllable ”behind-the-meter” technologies to its customers, recently launched a pilot project offering free Span panels to up to 100 test customers. It’s planning to use those panels as a stand-in for the digital ”smart meters” used by utilities to track and monitor customers’ energy usage, as well as to tap their more fine-grained control of household circuits to monitor and manage electricity usage.

Span panels cost quite a bit more than smart meters do. But if these panels can also prevent an even more expensive utility service upgrade, state regulators may decide that the additional cost is worth incurring and is a wise use of utility customers’ money, Rao said. While he wouldn’t say which utilities might be considering asking regulators to approve such an expense, he said ”we’re enabling conversations” via pilot projects.

Rewiring America’s Matusiak said this concept fits into the broader idea that the line is blurring between electric equipment in homes and buildings and electric equipment on utility grids. It’s ”all part of a dynamic load-balancing future,” he said. ”The behind-the-meter activity is strategically important to the front-of-the-meter” world of utility grid operations. ”We should have a holistic strategy for getting that done.”

Another company exploring the interface of homes and grids is Sense, the San Francisco–based startup with energy-sensing and analytics technology that’s being used in Schneider Electric’s smart electrical panel and in smart meters from global vendor Landis+Gyr. Sense is working with a handful of home energy equipment providers on an open-source software project aimed at enabling electric appliances and EV chargers to coordinate themselves to automatically reduce their collective power demand to stay within utility service limits.

Much like Span has done with Rewiring America, Sense has collected data from its home energy device customers that indicates this kind of load-balancing can prevent households from exceeding the limits of their electrical panels.

Chart of Sense's analysis of home electrical loads with and without real-time power management

Sense’s analysis of how controlling multiple in-home devices can keep total home demand for grid electricity below utility service limits (Sense)

“If we get all these devices in homes, and we all get EVs, everyone’s wringing their hands, asking, ‘Is the grid up to it?’” Sense CEO Mike Phillips said in a May interview. But ”all these things are hardly ever running at the same time. It’s only 1 percent of the time you’d have to control the EV charger to stay under 100-amp service.”

Scott Hinson, CTO of Pecan Street, agreed that EV charging is ”amazing for flexibility of load,” given that most EVs are parked at home for eight to 12 hours per day. Depending on whether homeowners are using Level 1 or Level 2 residential chargers and how depleted their EV batteries are when they return home, they may need as little as half an hour to several hours to recharge their vehicles.

For utilities to adopt technologies like Span’s or Sense’s en masse would require a good deal of testing and standardization. ”A common interface between devices would be really helpful,” Hinson said, but the standards for creating that interoperability are in the process of being fleshed out. Still, ”there is a huge opportunity to avoid the cost of upgrades for consumers.”

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