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Rise of the Energy Prosumer

For many decades, energy distribution has been set up as a one-way delivery system, from utilities to homes and businesses. But now, those who have traditionally only consumed energy are also producing it, primarily using technology to create solar and wind power. Because their role in energy distribution is significant, it is no longer appropriate to think of them as solely energy consumers. Those who both consume and produce energy are known as energy prosumers. Daron Christopher writes for the U.S. Office of Energy Efficiency & Renewable Energy writes, “The rise of prosumers highlights one of the most exciting trends in renewable energy.”

But, what exactly does being a prosumer entail? Here are some things to know about energy prosumers.

Prosumers are still connected to the grid.

Energy prosumers may not always be able to produce all the energy they need, so are still connected to the grid to supplement their usage. This connection is particularly useful during peak times, such as the hot summer months, which require more power to cool buildings. At those times they may supplement what they produce themselves with traditional one-way energy distribution. At other times, they may produce exactly the amount of electricity they need, or, if they produce more than that, they may sell it to the utility company.  

Prosumers are both individuals and businesses.

Energy-producing solar panels, wind turbines, and more can be installed for either homes or businesses. According to Elaine Ulrich, writing for the U.S. Office of Energy Efficiency & Renewable Energy, businesses can also use solar “in conjunction with combined heat and power [CHP]…. This technology allows businesses to use the heat that would normally be lost in the power generation process to be recovered for use in heating or cooling….” According to another article from the Office of Energy Efficiency & Renewable Energy, “CHP may not be widely recognized outside industrial, commercial, institutional, and utility circles, but it has quietly been providing highly efficient electricity and process heat to some of the most vital industries, largest employers, urban centers, and campuses in the United States.”

Prosumers can sell electricity to each other.

Prosumers are experimenting with not only a two-way flow of energy, but an all-way flow in which neighbors, using blockchain technology, can sell excess energy to each other. Jeremy Wagstaff writes for Reuters, “Blockchain is a database of transactions distributed among multiple computers. It solves two key problems in the online world: transacting without the need of a trusted intermediary, and making sure those transactions can’t later be altered, removed or reversed.” The technology, states Wagstaff, can be used by the energy industry as “a way to better handle the increasingly complex and decentralized transactions between users, large- and small-scale producers, retailers and even traders and utilities.” This method has tremendous growth potential, and has already been used by several large energy providers.

Prosumers may eventually go off-grid.

As solar panels, solar inverters, and battery storage units become more effective and affordable, energy prosumers can become less and less reliant on the grid for electricity. Benefits to “cutting the cord” with a utility include saving money, reducing hassle, and protecting the environment.

Prosumers can save money.

Generating some of their own energy can save prosumers money, particularly with solar. “Switching to solar,” states Ulrich, “can help balance a budget, making the prosumer lifestyle a worthwhile choice…. As more financing options become available, solar energy will become even more affordable in cities across the country.”

As a number of factors come together, energy prosumers will become the standard. More widespread financing, refined technology, and consumer comfort with the idea of generating some of their own power will all play a role in the emerging rise of the prosumer.

Content Discussion

Bruce Mweemba's picture
Bruce Mweemba on July 6, 2018

Dear Karen, 

kindly help me understand why you say prosumers can sell power to each other using block chain technology. 

I am imaging producing power by wind or solar for my house. The only way my neighbour will have access to my power is to connect his house using conductors or cables. Then there has to be some manual or automatic switching for my neighbour to be connected. 

kindly put it in context. How exactly does block chain technology work? At what point? 

Karen Marcus's picture
Karen Marcus on July 12, 2018

Bruce, I think this article explains it well: https://medium.com/wolverineblockchain/p2p-energy-trading-on-the-blockchain-db61fa2c8caf.