As the grid transitions to more renewable energy and consumers seek increased control over their energy use, partnerships between energy producers and a smart home tech providers could benefit all.

In what is reported to be the first major merger of its kind, NRG, an electricity generating company based in Houston, announced it plans to buy Vivant Smart Home Inc., a smart home technology provider based in Provo, Utah, for $2.8 billion. The deal is expected to close in the first quarter of 2023.

By accessing Vivint’s platform, NRG will enable residential customers more control and management of their energy usage. Ideally, they can “flatten out” peak demand, lowering their bills. It will also boost resilience and reliability during times of grid stress, according to Laura Avant, NRG’s director of corporate communications.

With clean energy playing a bigger role in electricity generation, Travis Miller, energy and utilities strategist for Morningstar Research Services LLC, recognizes that legacy fossil fuel power generation may be on its way out. In its place is a new model focusing on the customer by creating a solution at the intersection of clean energy and smart technology for residential customers.

Back in 2018, Mauricio Gutierrez, who was chief executive at NRG at the time (and is now the company’s president and CEO), told Energywire, “Our business, instead of starting in generation and then finding an outlet for our megawatts, is going to start with the customer, and then we’re going to find what is the right supply for that customer.”

This move could also help NRG reach its goal of net-zero carbon emissions by 2050. Instead of increasing generation to meet peak demand, widespread use of smart technology in homes could provide data and insight into demand, according to Bethany Sparn, senior research engineer at the National Renewable Energy Laboratory. Tapping into customer-level data could provide utilities and consumers more control over energy usage.

There’s currently little data on the efficiency gains provided by smart thermostats and other smart appliances. In a pair of experiments run by the Oak Ridge National Laboratory in partnership with Southern Co. and its Alabama Power unit on homes equipped with smart appliances, researchers discovered that energy consumption could be reduced by 44% and peak demand cut by 34%.

Consumers won’t be the only ones in charge of their energy usage. A utility can instruct a smart thermostat to lower the heat or air conditioning during times of grid stress. Similarly, it could turn on a washing machine or EV charger when demand and rates are low.

According to a 2021 survey by the Smart Energy Consumer Collaborative, 73% of respondents are OK with that. They trust their electricity provider to give “the best advice on managing my energy.” Similarly, a 2021 report from professional services company Accenture PLC reveals that 74% of the 500 energy executives interviewed say customers prefer “new, more innovative players.”

But Tim Brennan, professor of public policy and economics at the University of Maryland, Baltimore County, expressed concerns that merging utilities with home technology companies could give rise to regulatory questions, as the lines between retail electricity and generation continue to blur.