Skip to content

The Prosumer Disruption

March 19, 2024

So, what exactly is a prosumer?

 

The word “prosumer” is the blending of “producer” and “consumer” into one word. It refers to an individual or entity that not only consumes goods or services but also produces them. The term originated in the field of economics but has since expanded into various contexts. In the energy industry, a prosumer refers to a traditional customer who is also a producer of energy, typically through the generation of electricity.

 

Prosumers in the energy industry often install renewable energy systems on their properties, such as rooftop solar panels or small wind turbines, to generate electricity for their own use. In some cases, they may generate excess electricity that can be fed back into the grid, allowing them to sell their excess electricity back to utilities.

 

Traditionally, utility companies have built large generation facilities that provide power to everyone. The emergence of prosumers in the energy industry is reshaping traditional energy models by decentralizing power generation. It also introduces new challenges and opportunities for energy infrastructure, regulation, and market dynamics as the industry adapts to accommodate these distributed energy resources (DERs).

Challenges

 

Navigating Grid Dynamics:

Utility providers face complexities of managing the influx of energy from diverse renewable sources like solar and wind. According to the Office of Energy Efficiency and Renewable Energy, “High solar adoption creates a challenge for utilities to balance supply and demand on the grid. This is due to the increased need for electricity generators to quickly ramp up energy production when the sun sets and the contribution from solar photovoltaic (PV) falls” causing a duck curve1. Striking a balance among intermittent energy flows requires advanced grid management systems capable of integrating and optimizing energy distribution.

 

 

 

Solar power duck curve
2 Source: Elements Visual Capitalist – Energy Shift

Evolving Pricing Strategies:

The surge of prosumers disrupts conventional pricing and revenue models within the utility sector, especially when using net metering as the billing method. With individuals generating and potentially selling surplus energy, utility companies confront the challenge of devising flexible pricing frameworks that encourage renewable energy adoption while ensuring financial sustainability.

 

What is Net Metering?

 

Net metering allows residential and commercial customers who generate their own electricity from solar power to sell the electricity they aren’t using back into the grid. 


Net metering is a billing mechanism that credits solar energy system owners for the electricity they add to the grid. For example, if a residential customer has a solar photovoltaic (PV) system on their roof, it may generate more electricity than the home uses during daylight hours. If the home is net-metered, the electricity meter will run backwards to provide a credit against what electricity is consumed at night or other periods when the home’s electricity use exceeds the system’s output. Customers are only billed for their “net” energy use.

 

Source: Solar Energy Industries Association (SEIA) 3

Mastering Data Complexity:

The use of smart technologies creates a large amount of diversified data for utility companies to sift through. The data is also now coming from more sources and causing non-traditional patterns of usage territory wide. In order to get actionable insights for grid enhancement and personalized customer experiences, utilities must develop robust data management systems capable of processing and leveraging all this information.


Opportunities

 

Embracing Renewable Energy Solutions:

There lies a golden opportunity for utility companies to achieve their renewable energy supply goals and reach their carbonreduction and net-zero emissions targets by collaborating with prosumers. When utilitycompanies embrace renewable energy integration, they reduce their dependency on fossil fuels and foster a sustainable energy ecosystem.

Renewables Management

Promoting Energy-conscious Practices:

The heightened awareness prompts individuals to prioritize energy efficiency. Utilities can capitalize on this trend by offering innovative energy management tools, tailored solutions for smart homes, and personalized guidance,empowering prosumers to sync their usage to the generation. For example, charging their car or cooling their home when the sun is shining, and the wind is blowing.

Creating Two-Way Customer Communication: It provides a new era of direct engagement between utility companies and their customers. There is real-time data being shared with the utility and the prosumer offering a transparent view of energy management to both sides. When utilities offer ways for prosumers to see their real-time energy, in combination with tailored energy plans, and incentives for conservation, utilities can build stronger bonds with their customer base, driving satisfaction and loyalty.


Powerley’s Technology for Utility Companies and Prosumers

We’re at the forefront of this revolution, empowering utility companies and prosumers with innovative energy management solutions. Our cutting-edge technologies enable seamless integration of renewable energy systems, optimize energy consumption, and provide real-time insights into energy usage patterns (as seen in the image on the right).


With Powerley, utility companies can leverage smart meter data and AI to predict, manage, and inform prosumers about their energy usage. While prosumers can maximize the efficiency of their energy production and consumption, unlocking new levels of sustainability and savings.

 

Visit powerley.com for more information.


Sources:

1https://www.energy.gov/eere/articles/confronting-duck-curve-how-address-over-generation-solar-energy

2https://elements.visualcapitalist.com/the-solar-power-duck-curve-explained/

3https://www.seia.org/initiatives/net-metering

NICOLE BONNEVILLE
HEAD OF MARKETING AT POWERLEY

Request a Demo

Request Demo
Name
Name
First
Last
Which of these categories best describe your role?* Select all that apply