Innovations in Home Energy Management: The End of Passive Energy Consumption

In an era where technology saturates every aspect of our lives, even how we power our homes is undergoing a profound transformation. Imagine a world where your house not only provides shelter but actively collaborates with you to manage your energy use. We are entering an age of consumerization of home energy management and it is a paradigm shift in how we approach energy usage and the design of home battery storage systems (BSS). 

At the forefront of today's energy management market lies a growing societal awareness regarding energy consumption. The driving factors vary but are heavily driven by cost savings along with environmental considerations, regulatory demands, grid modernization initiatives and a desire to reduce or eliminate reliance on traditional power grids. Simultaneously, the growing prevalence of smart home devices — from thermostats to video doorbells — has set a new standard in how consumers interact with, control and monitor their homes. This trend now extends to power.

The days of passive energy consumption are fading. Instead, advancements in home battery storage system technologies and consumer-driven user experiences are igniting an era where homeowners are empowered to make informed decisions about their energy usage. Let’s look at the trends driving both the adoption and design of home energy storage systems in this fast-growing market that is expected to reach $13.05 billion in 2027, up from $2.78 billion in 2020. 

As homes transform into interconnected ecosystems of energy production and consumption, key trends are reshaping the way we approach energy efficiency and control.

Residential Renewable Energy is Rapidly Growing 

Incorporating renewable energy in the home is a burgeoning trend, reflecting the wide variety of influencers previously mentioned such as cost savings. Homeowners are increasingly adopting solar panels and energy storage systems to harness and manage renewable power. This shift is driven by the increasing availability and affordability of these technologies, enabling households to achieve greater control over their energy sources and enjoy more predictable long-term energy costs. But renewable energy is not without its challenges — most notably, the decline or absence of energy production when the renewable source is not available, such as a solar panel operating at night. 

Home Battery Storage Systems Give Consumers Energy Autonomy and Cost Savings

The environmental factors that influence renewable energy production have led to increasing adoption of home BSS — also known as residential energy storage systems (ESS) — which typically use lithium-ion batteries to store excess energy generated from renewable sources. A BSS such as the Tesla Powerwall provides resilience during power outages similar to a generator and can offset grid usage at off-peak renewable production periods. To ensure the BSS operates without failure — such as avoiding thermal-related risks — a battery management system (BMS) monitors the status and health of each individual battery and adjusts performance accordingly. 

One advantage of energy autonomy is minimizing the financial impact of increasing energy prices. Within the United States, a household’s average electricity bill increased 30% from $0.129 kWh in January 2013 to $0.168 kWh in January 2023. This rate of change is accelerating. In only one year, from January 2022 to January 2023, costs increased 14% — an identical increase as seen over the nine-year period from January 2013 to January 2022. Much of Europe has seen an even more significant rise in costs, with some countries experiencing increases close to or over 100% — leading to increased demand for alternative energy. 

Outside of financial savings, there may even be an opportunity to profit. A BSS unlocks the possibility of selling surplus stored energy back to the grid, offering financial incentives and supporting the broader transition towards a decentralized energy landscape. The widescale effects of this were recently seen in the European Union, where the rapid rise of energy prices has led to mass adoption of solar energy. Now, the overproduction of solar is causing energy prices to turn negative, leading to energy companies paying the homeowners. This is now becoming a relatively frequent occurrence, and a similar situation has even been seen in the United States. 

While this overproduction provides financial benefit to homeowners, it’s also a reflection of challenges to come. Traditional power plants can’t simply shut down whenever there’s a sunny day, and even scaling back production can be problematic. Herein lies a tremendous opportunity along with a big challenge. If home battery systems can store up enough energy during the summer, they could — in theory — use that power in the darker winter months and alleviate the immediate impact on the grid. Current battery storage technologies are not yet there, but they are improving rapidly.  

For the design engineer, sending energy back into the grid also adds a layer of complexity. Although high power quality is fundamental to the consistent operation of a BSS, the power being sent back to the grid must meet very specific requirements. This places unique emphasis on the performance, quality and reliability of the components within, such as the busbars and variety of connectors used.

Smart Home Energy Management Systems are More User Friendly

Whereas the battery storage system is the means by which energy is trapped and released, the energy management system (EMS) acts as the central control mechanism for how, where and when that energy is being used — often providing a user interface over an app. The evolution of the residential EMS is marked by the convergence with the Internet of Things (IoT). The smart functionality built directly into the EMS can provide users with up-to-the-minute insights into energy consumption down to the device level. The access to real-time data can empower individuals to make informed decisions about energy usage and help reduce costs by minimizing power consumption, such as cutting back HVAC runtime. This visibility also provides homeowners with a different type of informed decision making, such as whether they decide to replace a home appliance or other device that is more costly to run than expected. The consumer awareness means efficiency suddenly becomes even more important to appliance, HVAC and other residential system manufacturers. 

The paradigm shift in visibility turns energy management into a proactive and personalized experience where technology enhances energy efficiency, financial savings and independence. And in much of the same way as smartphones, vehicles and other consumer-facing applications, the user experience is critical to capturing and retaining market share.  

The Vehicle-to-Home Connection

As electric vehicles (EVs) become more mainstream, home charging becomes commonplace. It only makes sense, then, that the question expands beyond “How does the home power the vehicle?”  to “Can the vehicle also power the home?” This is already a reality as shown by the electric Ford F-150 Lightning, a pioneering force in vehicle-to-home (V2H) technology. Thanks to advances in bidirectional charging systems, the Lightning’s battery can be used as a home battery backup for up to three days, offering a practical solution for unforeseen power disruptions. GM has announced its own push to enter the V2H market, introducing its Ultium platform of vehicles. 

Beyond V2H technology, there’s even the opportunity for old EV batteries in home battery storage systems. A battery’s overall state of health degrades over time, but the definition behind a spent battery changes per application. While an aged EV battery may no longer be efficient for a vehicle, it can have uses elsewhere. Norway-based ECO STOR takes used EV batteries and repurposes them into home solar energy storage solutions. EV batteries are considered defunct in an EV when capacity drops below 70%. This innovative approach not only extends the life of EV batteries, but also presents a forward-thinking model that could shift the focus of the design of energy storage systems. 

The market for home battery storage and energy management systems is ripe for innovation, providing tremendous opportunities — and challenges — to manufacturers in the space. But no matter the features, quality, performance and reliability are necessities. 

With over 80 years of proven expertise in developing and deploying a scalable portfolio of safe and reliable products, Molex is at the forefront of the home energy management movement. Our extensive range of high-performance busbar, connector and cable assembly solutions is backed by our unmatched engineering expertise, global footprint and focus on customer collaboration. We’re excited to work together to bring the next generation of home battery storage systems to life. Visit our Home Energy Storage Solutions page to learn more.