Capacity for Change: The Opportunity for Smart Panels

As the energy industry grapples with the dual challenges of modernizing infrastructure and advancing carbon-free energy technologies, smart panels emerge as a promising solution. These devices are more than just a technical upgrade, they represent a move toward more intelligent and adaptable power management in residential settings and unlock pathways for residents. This is critical when technologies such as electric vehicles have the highest nameplate load among all residential electric loads and the United States is moving rapidly toward its clean transportation targets. Pecan Street, a national research organization, found at least 48 million homes nationally may need electric panel upgrades, which could add between one and two billion dollars a year to the cost of upgrading homes for full electrification. [1]

Smart panels provide a solution to enable greater electrification by preventing the need for the upsizing of electrical service for 125-150 Amp homes and avoiding upstream distribution infrastructure investment, but they also offer benefits for 100 Amp homes which inherently require full-scale upgrades. To understand the value streams for utilities and customers, SEPA recently facilitated two roundtable discussions with 17 utility representatives from large IOUs to small rural electric cooperatives and found that smart panels have a role to play in residential electrification, however the technology must be leveraged and paired with the right systems and use cases to achieve the maximum benefit.

Smart panels prevent circuit overloads and enable homeowners to integrate solar panels, EV chargers, and residential energy storage seamlessly, making their homes more efficient and environmentally friendly. With advanced load management capabilities that allow them to dynamically balance home energy use and integrate additional assets, smart panels can significantly mitigate the risk of overloading – specifically in single-family residences and multi-unit dwellings with limited panel capacity. In rural areas and low-income communities, smart panels provide a transformative solution to bypass traditional infrastructure upgrades for immediate, cost-effective electrification. Through equitable access to cost- effective and reliable power management, these communities are able to experience the benefits of electrification, such as reduced energy costs and increased access to clean, modern technologies without the need for costly service upgrades.

This is achieved through the leveraging of companion technology. Advanced home energy management systems (HEMS) complement smart panels by providing predictive load balancing, which carefully adjusts power distribution without abruptly cutting the supply to any appliance, thus unlocking value for the resident and delivering a positive customer experience. In territories which utilize time-of-use rates, smart panels have the potential to balance the load on circuits and calculate how to run as many assets as possible without pulling from the grid. This avoids high prices during peak times and lowers electric bills. Homeowners with solar can also benefit from coupling their systems with smart panels by selling energy back to the grid during periods of high-demand. In addition, HEMS can optimize for a particular goal, such as cost reduction or emissions reductions, to provide a targeted benefit specific for the household.

As such, the value for customers is two-fold: (1) the flexibility to adopt modern technology and defer or avoid the substantial costs of electrical service upgrades; and (2) A hands-on approach to energy management that allows the monitoring and control of energy generation, storage, and/or consumption with a positive impact on energy bills.

One challenge smart panels present is potential abrupt power cuts to various appliances due to opening and closing circuit breakers, but this predominantly occurs if they are not paired with HEMS or programmed effectively. While a smart panel can still achieve desired reductions in overall consumption on its own, this load management method may pose risks to appliances which utilize motors and the sudden power interruption can impact appliance longevity. This approach predominantly affects the customer experience and causes a disconnect between the customer’s needs and balancing household load. Ensuring that smart panels manage loads effectively while also sustaining the continuity and functionality of connected devices is crucial in maintaining customer satisfaction.

Thus, when considering the options for a particular use case, utility representatives factor in customer experience and cost to ensure the right fit. The upfront cost of smart panels can be prohibitive, particularly in cost-sensitive markets, and they may be infeasible for low-to-moderate income customers without financial support. Utilities are now considering investing in new technology for behind-the-meter upgrades, which have the potential to yield long-term benefits, but there are other products which can provide this functionality at a lower cost. Utility representatives identified alternatives such as smart breakers, circuit splitters, meter socket adapters, smart EV chargers, existing demand management systems, and advanced metering infrastructure (AMI). The caveat is that each of these technologies have their own use cases. Utility partners have sought to find the right fit when matching a solution for each unique site. Solutions can vary, and some attach to traditional breaker boxes in order to facilitate the same functionality as a smart panel, but with a limited scale and a smaller price tag. The trade off is less flexibility or user control when choosing these scaled down options, which is why each solution must be chosen for the right use case.

To mitigate the financial challenges, incentives aimed at reducing a home’s carbon footprint are an important step when deciding which solution is the best fit. Under the Inflation Reduction Act’s (IRA’s) 25C and 25D tax credit provisions, individuals can receive up to $600 when installing a smart panel with a heat pump, or around $1,000 when installing a smart panel with solar or energy storage as long as it allows the building to serve a load of 200 Amps. States will also begin launching programs under the IRA’s High-Efficiency Electric Home Rebate Act (HEEHRA) in 2024, which covers 100 percent of electrification project costs for low-income households and 50 percent of costs for moderate income households (up to $14,000), and project costs will cover both purchase and installation costs. [2]

The value proposition for smart panels is not solely for the customer. Our discussions with utility representatives highlighted the importance of leveraging AMI capabilities to create a cohesive system that optimizes energy use across the network and improves customer interfaces. As utilities gain insight into energy use and leverage the data from smart panels, it opens up pathways for improved load management, reducing the need for widespread and costly capacity upgrades for utility-side infrastructure, like transformers. As we look to the future of monitoring and communications, the opportunity exists for advanced distribution management systems (ADMS) to integrate the supervisory control and data acquisition (SCADA), outage management system (OMS), and distribution management system (DMS) into one platform. This setup allows for real-time data and control, enabling predictive load management that adjusts power needs without disrupting daily activities.

Despite ongoing innovation in smart panel technology and pilot utility programs which seek to understand the broad range of benefits to customers, ongoing research into cost-effective implementation strategies, long-term benefits to grid stability, and customer acceptance is essential. Collaborative efforts among utilities, technology providers, and regulatory bodies will allow for solutions that are both practical and equitable, ensuring that advancements in smart panel technology continue to contribute to broader energy efficiency and sustainability goals.

To further this discussion and explore the evolving role of smart panels in our energy future, we invite you to join us Wednesday, September 11, 2024 at the “Smart Panels Plus: Turning Buildings into DERs” at RE+ Anaheim. This will be an opportunity to share insights, address challenges, and collaborate to drive the industry forward.

SEPA, in collaboration with SPAN, will continue research aimed at understanding the scope and scale of the challenge for overcoming residential service and panel constraints.

1. (2021). Addressing an Electrification Roadblock: Residential Electric Panel Capacity, Analysis and Policy Recommendations on Electric Panel Sizing. https://www.pecanstreet.org/wp-content/uploads/2021/08/Pecan-Street-Panel-Sizing-Whitepaper-Update.pdf

2. “High-Efficiency Electric Home Rebate Act.” Rewiring America, www.rewiringamerica.org/policy/high-efficiency-electric-home-rebate-act.