‘Energy Sharing’ the newest addition to the sharing economy
Got power to spare? New ‘Airbnb of energy’ services will buy your unused energy, paying you to turn off your lights.
Thanks to Uber, the days of waiting in the rain to hail taxis are over. Soon after Uber up-ended the taxi industry, AirBNB unlocked a new treasure chest of value for homeowners.
Next up in the sharing economy? Your home’s energy.
Armed with the knowledge that consumers want clean energy at an affordable price, experts in the energy industry have been looking at the sharing economy to fuel its next cycle of innovations. And just like customers of Uber and AirBNB, people want to be rewarded when they use energy smartly.
Energy sharing programs paying consumers for unused energy
Within a few years, energy sharing programs are estimated to deliver nearly $5B back to residents.
Here’s how energy sharing works:
The public and private organizations that manage the grid produce just enough energy to power what’s needed. They calculate how much energy you’ll need, how much your neighbor will need, how much the business down the block will need, and so on. Those figures add up to determine how much total energy is needed that day. However, once in awhile, the calculation doesn’t exactly predict how much energy is needed, and more than predicted is needed to make sure that light bulbs and TVs remain on.
When more energy is needed, one of two things can happen:
- The people who operate the grid decide to turn on an expensive ‘backup’ power plant or...
- ...you can share the energy allotted for you with the people who are using more than expected and get paid for it.
In scenario #1, the grid continues to rely on expensive ‘backup’ power plants, which cost hundreds of millions of dollars to build. The high cost of building these new ‘backup’ power plants contributes to high energy costs. What’s more, this energy is much more harmful to the environment than normal.
What happens in scenario #2? When you share energy with other people on the grid, the grid doesn’t need to rely on expensive and dirty backup power plants. Plus, most energy sharing programs give you a kickback for helping out.
Because of the obvious upsides (clean energy and a chance to earn money) people have been overwhelmingly demanding option #2. Research has shown that consumers want more ownership and transparency over where their energy comes from and how they use it.
Energy regulators have been responding in kind. Over the past few years, regulators have mandated that their grids allow users to share their energy use amongst each other. Program participants are no longer just consumers, but are rather participating in a fluid and open marketplace.
One of the first companies leading the charge to bring energy sharing to the public, OhmConnect, has been simplifying the process for users. Their service sends timely notifications about when to share energy and facilitates easy ways to redeem rewards.
Like Uber and AirBNB, energy sharing companies face the challenge of educating the public about the existence of this type of service. Considering how many people are unhappy with the rising cost of energy and our collective reliance on dirty sources of energy, it’s only a matter of time before most homes across the US participate in some sort of similar program.