Getting the Puzzle Pieces Together: The Challenge of Standardization
In the quest for a great customer experience, to leverage self-consumption or dynamic tariff offerings - or up to the level of wider aggregation in communities or virtual power plants (VPPs) - integration of devices is crucial. To make this happen in the distributed energy resource (DER) space, interoperability is key. It gives the basis for scalability and the possibility to build sustainable business models. However, to make this happen in an efficient way, a certain level of standardization is needed.
The Challenge on Home Level
The home level is a microcosm for the challenge of standardization. Different devices, each speaking its own language, are currently making customers despair. To fulfill the need for monitoring and potential control the only way out is to leverage several single Apps of the different manufacturers. There is a clear need for seamless integration to allow the best customer experience. Still, the lack of standardization can make this integration a time-consuming and costly endeavor hindering an efficient adoption of home energy management systems.
The Challenge for Aggregation
On a larger scale, also the Aggregation in e.g. Virtual Power Plants (VPPs) is suffering from the challenge of standardization. Here, different distributed energy resources (DER) from different manufacturers must be integrated into a cohesive, manageable unit. Or sometimes, several smaller sub- VPPs have to be integrated into a Master solution. The lack of standardization not only complicates integration, but also gives challenges on (real-time) monitoring and optimization, for example aligning the data resolution of a battery brand, with the one of a different heat pump brand. Integration, alignment and even better standardization are important in the long-run to effectively operate aggregated groups of devices.
The Process Has Started but Needs to Accelerate
In the DER space, some devices integrate more easily than others, indicating a slow yet ongoing move towards standardization. For instance, the EV charging space is progressing with the OCPP protocol gaining acceptance. On the heating front, Smart Grid Ready attempts are noteworthy but haven’t achieved a full breakthrough. Inverters (Solar/ Storage) pose the toughest challenge, being on one side the major actors for aggregation on home level and beyond, often only accessible via proprietary Modbus or API interfaces. Efforts like EEBus or Matter are underway, with big brands backing these initiatives. However, acceptance and implementation are not where they are needed.
Why the Motivation for Standardization is Limited
Even without standardization, the integration of different devices is possible, as solutions such as eNode, SolarManager and KiwiGrid show. However, this comes at a cost - both in terms of time and resources. Manufacturers often need to be convinced to see the benefits of standardization, and the only compelling argument in most cases are monetary incentives. In addition, the competitive landscape is leading to a race for dominance in the home ecosystem. Many strive to be the pioneer and sole player in the home, creating artificial barriers to entry, which in turn hinders the pursuit of standardization and leaves customers, especially with a retro-fit need (e.g. integration of a heatpump with an existing PV) alone.
Solutions showing Up
In order to overcome the challenges there are currently two main routes found in the market:
Solutions which are allocating a lot of time and money, building favorable relationships with manufacturers to ease integration. However, this approach may not address the full market-potential, but at least a good starting point. This is for example followed in the home energy management space by eNode, SolarManager or KiwiGrid. For software players on Aggregation it belongs in the meanwhile to their daily operations to integrate with different brands, e.g. Beebop, tiko Energy Solutions or GridX.
Solutions which are riding the new build wave are creating a closed ecosystem with the consumer. They are offering a minimum number of different device brands, targeting large sales volumes to support the scalability of integration process and attractiveness to open up on the manufacturer side (e.g., Sonnen, 1komma5, Enpal, Neoom, tibber). This also makes the live of Aggregators easier, leveraging the given flexibility on energy or grid services.
Both options represent valid market solutions, which might be chosen mainly by timing reasons. Whereas now the new build market is still booming, retro-fit will play an increasingly important role over the coming years.
Do We Wait or What Is Missing?
Should we wait for major players like Google or Bosch to resolve this issue? The hardware industry is still growing, making it plausible to argue that the current development is normal. However, time is ticking for #netzero, and waiting may not be an option. A more open and progressive approach towards collaboration can expedite integration, pushing us closer to our goal.
As we advance towards a more integrated and standardized DER space, the call for action is clear - #letsmakeithappen.
