Smart Grid

The United States currently has an inefficient and outdated electric infrastructure (Laudon & Laudon, 2011). A new technology has entered the market aimed to update and improve on the current electricity infrastructure. That technology is called the smart grid. A smart grid delivers electricity from suppliers to consumers using digital technology to save energy, reduce cost, and increase reliability and transparency (Laudon & Laudon, 2011). Smart grids would allow utility companies to directly monitor and adjust utility consumption for each household connected to the smart grid. The smart grid would also allow consumers to monitor and adjust their own usage to conserve energy. Proponents believe that if smart grids were implemented nationwide it could lead to a 5 to 15 percent decrease in energy consumption (Laudon & Laudon, 2011). However, the big question is whether the money and energy saved be worth the cost to implement the smart grid nationwide. Managing the information flowing into these smart grids requires technology: networks and switches for power management, sensor and monitoring devices to track energy usage and distribution trends, systems to provide energy suppliers and consumers with usage data, communications systems to relay data along the entire energy supply system, and systems linked to programmable appliances run them when energy least costly (Laudon & Laudon, 2011).

There are lots of things to be considered about implementing the smart grid technology. One of the biggest issues is whether consumers will be able to afford all the necessary equipment needed to implement the smart grid technology in their homes. Based on cost estimates from the case the average person would not be able to afford the startup cost for the smart grid. Would the utility companies or the government be willing to subsidize the cost of the equipment like they did for television converters? Another question is whether the utility companies are willing to take on the tremendous cost of building the smart grid infrastructure. In the case example Center Point Energy in Houston has already started charging residents and extra $3.24 per month to pay for smart grid technology (Laudon & Laudon, 2011). This could turn into a trend around the country, where many consumers are already strapped for cash.

Newer technology and alternative technology is also another thing to be considered when developing smart grid. Are their lower cost options to building the smart grid that could add up to just as much savings as the smart grid? Those alternatives need to be considered before investing millions into smart grid technology. Another thing to consider is how long the smart grid technology will remain relevant. Technology is always being updated. It would be a waste if money is invested into smart grid technology and then it becomes obsolete.

Ease of use should also be considered when developing the smart grid technology.