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Marc Gunther's picture
FORTUNE magazine

Marc Gunther is a writer and speaker who focuses on business and the environment. He worked for 12 years as a senior writer at FORTUNE magazine, where he is now a contributing editor. His most...

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Why the Smart Grid Is Taking So Long

The smart grid is coming. It…is…just…coming…very…slowly.

That’s the way I began a column published a week ago by The Network, Cisco’s technology news site. The column looked at Energy Smart Florida. one of the most aggressive efforts in the U.S. to roll out smart electricity meters and a smart grid. It’s being run by Florida Power and Light with the help of a $200-million stimulus grant, which was announced by President Obama back in 2009.

So what have your tax dollars produced, so far? Not a whole lot. More than 2.2 million customers have smart meters, which is a great start, but only about 500 have a fully-featured smart home that includes energy monitors letting them know how and where their electricity is being consumed and how best to conserve power. And the utility doesn’t yet offer time-of-day pricing, a key element of an intelligent grid that would allow customers to shift their usage to times of day when there’s less demand on the grid and electricity prices are therefore lower.

All of this, alas, is a reminder that transforming the energy sector is costly and hard. That doesn’t mean we should give up. To the contrary, it means that the effort needs more investment and focus.

Here’s how the story begins:

The smart grid is coming. It…is…just…coming…very…slowly.

In October 2009, President Obama stood in front of  an array of solar panelsin a small town in central Florida to unveil $3.4 billion in federal recovery act grants to modernize America’s electricity grid. About 100 companies and communities in 45 states were awarded grants. 

Upgrading the grid, the Department of Energy said then, will “promote energy-saving choices for consumers, increase efficiency, and foster the growth of renewable energy sources like wind and solar.”

“We’re on the cusp of this new energy future,” Obama said.

Nearly two years later, we’re closer but still on the cusp—at best.

That’s because, to do its magic, the smart grid requires smart utilities, smart regulators and, most of all, smart customers.

Florida is as good a place as any to look at how the smart grid is coming along, and not merely because that’s where the president launched his initiative. The state’s biggest utility, Florida Power & Light (FPL), which got a $200 million grant and played host to Obama in 2009, is rolling out Energy Smart Florida, one of the biggest smart grid projects in America.

Since then, FPL has installed about 2.2 million smart meters, said Bryan Olnick, vice president for customer service and smart grid solutions. That’s a big chunk of the five million smart meters that have been installed nationwide, a number cited in a June blog post by Energy Secretary Steven Chu.

If Chu’s five-million estimate is right—and grid data tends to be fuzzy–fewer than 5 percent of the nation’s 110 million homes are equipped with smart meters. Early last year, however, experts forecast that “the country will be at 20 million smart meters and 15 percent market penetration” by the end of 2010. We’re not even close.

You can read the rest of the column here.

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