Over the last five years, the smart grid has triggered debate, ranging from whether it should have been part of the stimulus package to concern over health and privacy risks to rising gas, electricity and water rates to the public’s lack of trust in utility companies. Surveys from the Smart Grid Consumer Collaborative revealed that less than 25% of the people in the U.S. have heard of the smart grid and even fewer truly understand what it is and more importantly what it means to them.

So why are we so excited about the potential of the smart grid?

Although there are a lot of challenges at hand, there are many reasons to be optimistic. We believe that upgrading the aging global infrastructure with smart grid technology will do more than increase reliability and efficiencies in the system. It will also provide the utility industry the opportunity to re-invent itself by empowering the consumers they serve in ways that are mutually beneficial. We are convinced that open and plentiful communication, coupled with savvy implementation, will result in widespread adaptation by consumers who have demonstrated a desire to take control over their energy use.

The Internet and GPS provide a road map.

Who knew the need for point to point communication between mainframe computers in the 50s would lead to technology giving rise to nearly instantaneous global communication? The initial goal was to develop technology that would interconnect the U.S. Department of Defense’s main computers. Later, educators and economists focused on adapting the technology which, while useful to them, had no relevance to consumers. It was years before consumer-facing technologies began to evolve and, though they were difficult to use, caught on fast.

CompuServe became the first service to offer electronic mail capabilities and technical support to personal computer users, thus enabling them to overcome the language barrier between them and the technology. That grew into America Online (AOL) and Prodigy with their dial-in networks providing communications, content, and entertainment features. During the 90s, the Internet became a central part of our lives. Email, instant messaging, texting, blogging and social media have revolutionized communication, just as the web has transformed publishing, commerce and the delivery of entertainment.

GPS was also a nascent technology; a multi-billion dollar technology initially developed and deployed by the U.S. Department of Defense for a specific need. Although the infrastructure was made fully functional in 1994, it wasn’t until 2004 that the first consumer-facing GPS technology was launched, when Qualcomm announced successful tests of GPS modules for mobile devices.

The first consumer GPS began as a hand-held device, clearly designed by and for a technical audience. It had a small screen that only displayed latitude, longitude and elevation – by no means a common language at the time. Luckily for us, consumer-facing companies like MapQuest and Google recognized that and created location-based maps (one of the first killer apps). Fast forward 10+ years, GPS still includes navigation but has markedly increased its consumer relevance, integrated into products like Google Maps, Yelp, Foursquare, and Facebook Check In, to name but a few.

Just as new businesses have been created around the Internet and GPS to serve customers around the world, rich data and the connection to the consumer provided by smart meters provides a similar opportunity. Right now, from the consumer perspective, these meters are largely silent because no one is presenting this rich data in innovative, creative and appealing ways. This is going to change because remarkable things usually happen when you get powerful personal data in front of the consumer that they can put to use.

Building the Utility/Consumer Relationship

Currently the utility/consumer relationship is primarily billing-related and the different consumption metrics used (kWh for electric, therm for gas, cubic feet for water) are completely alien to them. Right now, the focus needs to be on value of the smart grid to the utility so they are properly incentivized to manage the infrastructure build out. Once this phase has passed, their focus on consumers will be much more acute.

Utilities’ current methods of communication and data sharing do nothing to engage or empower the consumer, which given concerns about energy and water consumption shared by both the utility and the customer, needs to change. This is what we need to strive for in terms of engaging customers within the smart grid, making them feel empowered and enabling them to make informed decisions about their energy consumption.

A Bright Future

As the full potential of the smart grid is realized, consumers will become informed and empowered, and hold the industry accountable for the amazing experience they have come to expect in other areas of life. And in parallel, market forces and innovators will be unleashed to build incredible products and services to fill that service need. To drive towards success, all of this needs to be done under a shared vision with a patient, deliberate approach.

Dean Schiller is the founder and CEO of CEIVA Energy and CEIVA Logic, Inc.

Prior to CEIVA Logic and CEIVA Energy, Schiller held numerous senior level positions at Walt Disney Feature Animation where he was responsible for the technology behind its popular animated films including Beauty and the Beast, Aladdin, The Lion King and Pocahontas. Before that, Schiller spent four years working in Neuroscience at UCLA.