Soon the Smart Home Will Generate, Store and Save Energy

The washing machine and dishwasher are humming in the background as I write this blog in my home office. Ever since we installed solar panels, back in 2019, our energy consumption has plummeted. Instead of turning the dishwasher on at night – which used to be cheaper because of the lower night tariff – we try to use as much of our home-generated solar panel electricity during the day. If you have solar panels, you might have noticed a similar change in your own energy consumption patterns. But even if you don’t, it might pay to shift to daytime energy consumption.

Dynamic Energy Use

However, with renewables becoming a larger share of the energy production mix, grid operators also have to deal with major fluctuations in energy supply and demand. To prevent disruptions from an oversupply of sun, water and wind energy, they sometimes even have to shut down solar panels and wind turbines. To solve those issues, they are expanding and strengthening the grid, but that process will take years.

In the meantime, they are stimulating people and companies to use energy during the day when supply from renewables is high, for instance through dynamic energy contracts. With a dynamic contract, the price you pay for energy varies by the hour (for electricity) or the day (for gas).

In the Netherlands, for example, when you get up to take a shower and cook breakfast, you pay €0.17 per kWh. By lunchtime, the price has dropped to €0.05¹. In the early afternoon, when sun and wind are at their maximum strength, the price could even turn negative, which means you could get paid for using electricity, for instance by charging your electric car at that time.

Adoption of dynamic contracts is rising as smart meters and renewable energy become more common. In addition, EU legislation stipulates that suppliers with more than 200.000 customers have to offer dynamically priced contracts. While most countries still stick to the fixed rate or double (day/night) rate, in other countries – such as Norway, Finland, Estonia and Spain – dynamic contracts have become the norm.

Storing Power

Smart homes make dynamic contracts possible – since smart meters are an important enabler – and they benefit from it as well. Smart home energy systems take energy prices and your own solar panel power production into account. As a result, your home can pick the best moments to charge your car or home battery. Or use the power from your solar panels to warm your immersion heater to provide hot water. You can use that warm water even when the sun is not shining.

Already solutions become available to benefit from dynamic energy prices, for instance when charging EVs. Several companies are now offering bi-directional charging, a technology that enables electric vehicles to charge the battery when prices are low and push back energy to the grid when prices are high.

Last June, for example, German company The Mobility House collaborated with Renault’s digital transformation and energy transition subsidiary, Mobilize, to roll out this kind of vehicle-to-grid (V2G) technology in France, Germany and the UK². Owners of the Renault 5 EV (launched in 2024) and future EV models can use this technology to minimize their charging costs by selecting off-peak times at which to draw power from the grid.

If you do not have an electric car, you could buy a home battery that uses similar dynamics. Those batteries, however, are still costly; about €3,000 for a smaller low-capacity battery and up to €12,000 for one with higher capacity. Nevertheless, with many countries phasing out feed-in-tariffs (where you sold back electricity to the national grid) and possibly subsidizing home or neighborhood batteries, the market is improving.

Saving Power

Another option to manage your energy consumption is to consider saving opportunities. Since heating and air conditioning accounts for more than half of the energy use in homes (at least in the US),³ it pays to consider investing in a heat pump. The market is growing (see graph) with many governments making heat pumps a key part of their plans to reach net zero, using subsidies to make it more attractive for homeowners to install them.

Aside from heat pumps, savings can also be found in other household appliances, from refrigerators and washing machines to blenders. In part driven by government regulations, these devices are becoming more energy efficient, thus saving us power and money. Last April, the EU adopted new rules that should reduce energy consumption of devices in standby mode⁵, while the US Department of Energy proposed stricter energy standards last February.⁶

Intelligent Home Energy Management

Taking all the possibilities into account, your home can soon become your energy manager. Such a home combines a dynamic energy contract with an AI-based energy management system. It can turn devices on and off or charge and discharge them when most beneficial. It might even advise when to buy a new refrigerator to save energy.

In the meantime, however, my washing machine has finished and I will hang out my sheets to dry in the sun and wind. In contrast to all the solutions mentioned in this blog, that old-fashioned way of using renewable energy requires only a minor investment of time on my part.