As we move towards a more sustainable future, we've seen a rise in the deployment of technologies like residential batteries and smart thermostats to more efficiently manage energy use. Incentives and rebates from the Inflation Reduction Act and other policy efforts are making different types of smart energy devices more affordable for households, accelerating the trend of whole-home electrification. Leveraging the integrated “smart home” to participate in virtual power plants (VPPs) has been a topic of interest for years, with various pilot projects exploring the possibilities for more than half a decade. 

In 2023, we’ve reached a tipping point. 

2023 will be the year when multiple devices - including residential batteries, electric vehicles (EVs), smart thermostats and other distributed energy resources (DERs) - will start participating in electricity markets together under a single roof. 

One household, multiple smart energy assets

Leap partners with over two dozen providers of residential DER technologies to facilitate energy market access, and we’re seeing an explosion of interest from these partners in coordinating multiple devices in their customers’ houses to participate in grid services programs. In 2022, Leap didn’t have a single home participating with multiple devices. By the end of this year, we expect thousands of households to have multiple types of energy assets participating through the Leap platform. We see this being primarily driven first by EVs and smart thermostats, with batteries and other DERs following shortly thereafter. 

Recent announcements from Leap’s partner companies EnergyHub, Resideo and Optiwatt illustrate this trend. EnergyHub, a leading provider of distributed energy resource management software (DERMS), recently announced a new integration with multiple EV partners. This integration will allow EnergyHub’s platform to manage and control EV charging stations via EnergyHub EV, while also providing EV owners with incentives for participating in flexibility programs. 

Resideo, another leading DERMS provider that historically has focused on thermostats, recently announced an integration with AO Smith, a smart water heater company. They are also actively completing technical integrations with multiple battery original equipment manufacturers and electric vehicle providers.

Optiwatt, a fast-growing DERMS provider that historically focused on EVs, also recently announced a new program that will allow customers with smart thermostats to connect to the Optiwatt app and earn money by participating in DR programs. These are just a few of Leap’s partners that are actively exploring how to integrate multiple devices within a single home into grid services. 

Transforming residential demand response

Coordinating multiple devices within a single household to respond to DR events has implications for extending the duration of responses, increasing the size of responses, stacking different grid service revenues and increasing the number of events residential customers can respond to without impacting their comfort. With EVs, batteries and thermostats participating together, we see a path for residential customers to consistently generate nearly $200 of revenue per year in markets like New York and California.

Today, we are seeing less than a 2.5 kWh shift in energy on average for smart thermostats and EVs and a 5 kWh shift in energy for a residential storage system during four-hour duration events. Together, these devices will be able to shift 10 kWh or more over a four-hour dispatch event. This means that with a single home’s authorization to participate, two to four different devices with a cumulative peak load of over 7 kW could be coordinated in grid services programs.

Estimated annual value per residential customer with multiple energy devices participating in grid services (Leap analysis):

With these assets performing in DR programs together, residential customers can participate much more frequently than they could in smart thermostat-dominated residential DR programs. Previously, if a customer only had a smart thermostat, changing set points multiple times per week would lead many customers to become frustrated by the program and opt out. Diversifying the assets participating within a single household reduces the impact on customer experience, enabling devices to participate much more frequently. Automation capabilities - like those provided through Leap’s API - also enable different assets to participate in new types of grid services programs. 

The trend towards integrating multiple home energy devices into electricity markets represents a significant step towards a more sophisticated distributed energy economy and a smarter, more flexible future for the grid. By participating in these markets at scale, DERMS providers can transform their grid revenue potential and unlock new value for their smart home customers  while also helping to balance the grid and reduce the need for centralized power plants. The recent announcements from EnergyHub, Resideo and Optiwatt are just a few examples of the many exciting developments we can expect to see in 2023 and 2024 as these technologies continue to scale.

Ready to maximize energy market participation for your DERs? Learn more about partnering with Leap.