Putting a Price on the Smart Grid

Even though details of the Smart Grid upgrade are still being worked out, there's been a common understanding that the project will be big. The Electric Power Research Institute places the cost estimate at $165 billion over 20 years, according to a recent article in BusinessWeek.

According to the article, Cisco Systems – one of the technology companies working to develop technology for the modernization of the grid – estimates "the gear needed to overhaul smart-grid communications alone may reach $20 billion a year in five years."

As reported recently in MDM ("What is the Smart Grid?"), even with the Smart Grid still in a development phase, opportunities already exist for distributors and manufacturers to get involved in projects related to the modernization. From advanced metering systems to conversion mechanisms to simple higher-capacity transmission cables, a broad range of products will be required.

Even if you don't see sales opportunities in the Smart Grid, there may be opportunities for your company to gain savings from early adoption of Smart Grid initiatives. That same BusinessWeek article provides the example of how utility providers, including PG&E in California, are beginning to purchase power from customers with solar panels – a practice the Smart Grid is meant to make easier:

"Done right, the revamp will cut bills, reduce consumption, give users more say in the kinds of energy they use, and even let customers produce their own energy and sell it back to power providers."