Two explosive growth markets are renewable energy (RE) and the Internet of Things (IoT) technologies and both play a crucial role in creating value. The emphasis on how software and analytics can drive energy savings along with renewable energy and energy conservation measures (ECM) will be examined. Companies, like Arkados, exist that operate in the solar (through its recently announced acquisition of SolBright Renewable Energy), LED lighting, and IoT markets.
Market
The IoT market is demonstrating substantial growth. According to McKinsey, the IoT market should grow from $900 million in 2015 to $3.7 billion by 2020. One of the key drivers of the IoT market is smart building applications where energy savings provides the return on investment (ROI). IoT applications play a leading role in renewable energies in including solar and wind.
Global investment spending in the solar PV markets was $161 billion in 2015, according to Bloomberg New Energy Finance. GTM Research and the Solar Energy Industry Association (SEIA) indicated that the US solar industry grew 95% to 42.4 gigawatts (GW) in 2016. According to the SEIA, the US solar market installed 14.6 GW of solar PV in 2016. In the global market, approximately 73 GW of solar was added in 2016.
However, when solar is measured against conventional energy sources such as natural gas and coal, solar represents approximately 1% of the energy generation in the US according to DOE. Despite the successful growth of solar in the US market, there is substantial upside for further growth. Fueling the solar market growth are falling PV panel costs and the extension of tax credits. Solar PV panel costs are at grid parity in most states. Solar power generation at a cost of approximately $0.13 per kWh is close to the US national average rate at $0.115 per kWh.
Technology Positioning
Solar costs at grid parity should be great news for commercial and residential applications as well as for the utility industry itself. However, renewable energy has limitations, and therefore, new technologies employing IoT devices and analytics can further enhance the market for solar and drive higher energy efficiency. These technologies apply to buildings and utility markets where tools and technology are required to better manage electric supply and demand. This image depicts how IoT can be employed in various objects to enhance energy data.
One issue for renewable energies is that their ability to generate power is intermittent. Because renewable energy is intermittent, energy storage is a crucial component to enable the distributed grid where electric supply has to match demand. Energy storage is a critical component of the distributed grid architecture. The ability to store energy is important to improve RE value and to provide power when RE sources are not available.
The US grid was built to generate electricity from fuels such as natural gas, coal, hydro and nuclear and transmit electric to substation for distribution to customers. Utilities globally are implementing micro and distributed generation grids meaning they are introducing electric generation at end points in the network. Solar generates energy and without the ability to derive granular insight in energy supply and demand, energy can be wasted. This is one area of focus for IoT connected devices and analytical software.
In addition, Net Metering, a process that credits the owners of solar generation systems for power added to the grid, helps solar become more attractive for customers. Several states including Arizona, California, Colorado, Connecticut, Delaware, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Ohio, Oregon, and Pennsylvania have implemented net metering.
Arkados, and other like companies, are employing IoT devices and software to enhance value of renewable energy and facility operations. These technologies include energy and environmental sensors that enable diagnostic feedback loops to compare energy efficiency to facility conditions and set points.
Part of the process is educational to demonstrate the feasibility and viability into an organization. Some concepts are simple such as performance bench-marking to identify aberrant conditions or major areas of concern. Key metrics include energy density in kW and kWh per square foot. Facility load factors and equipment load signature are also helpful is comparing procedural operating hours to measured operating hours by equipment.
Some of the approaches include fog analytics such as pushing intelligence to the edge of the network using IoT devices to capture granular detail and enable local processing and control. The concept is to push context awareness to the sensors and collect data in the process. This process includes remote control on lighting and equipment. The real benefits from IoT and analytics are huge including reducing costs, increasing energy efficiency, asset protection, and predictive maintenance.
Value
The value of energy savings must be within a two-year payback to gain acceptance by the market. In other words, the RE and ECM investment ROI should be greater than 50%.
To achieve energy savings insight, generate data from an array of sensors at a granular level. Meaning continuous monitoring of sensor data that can be used to enhance energy performance. Typical energy savings initiatives would include cutting back at peak kW demand and duration and can be used to substantially reduce energy costs. Conditioning less outside air is effective in reducing HVAC costs. Modulating outside air intake using demand control ventilation employing CO2 sensors is an effective energy savings method. Demand Control Ventilation has been able to demonstrate HVAC efficiency gains of 24%.
Automated measurement and verification (M&V) systems provide mechanism to deploy demand response. Some studies suggest demand response has the potential to reduce energy costs by 40%. Monitoring based commissioning (MBCx) can save money simply by measuring consumption to set point changes in and facility environmental conditions. The futuristic approach is to combine energy monitoring with sales and installation of LED lighting and solar PV systems.
Conclusion
Energy savings and efficiency gains measure the value created through IoT and analytics. With the rise of both of these initiatives, consumers should be more aware of their energy consumption in the near future as more of this technology is available to them. Software developed by companies provides a means of enhancing the benefits of solar and LED lighting by gaining insight into energy consumption in addition to enabling efficiency optimization using diagnostic feedback loops. Today, consumers should focus on leveraging software and IoT capabilities to drive sustainability and improve energy efficiency for solar and LED lighting initiatives.
