How do you define a smart city? If you’re an average urban resident, you believe it’s the use of electronics, devices and systems that collect and interpret digital data to improve resource efficiency and quality of life. While most utilities and technology providers would agree, the term “smart city” has evolved, and is born out of the technological advancements a given society has available or is developing at the time. Many resources and technologies intersect to deliver the current smart city experience — all tied together by one feature: data. Whether it be traffic pattern data informing street light timing and public transportation schedules or solar arrays powering local schools, hospitals and businesses, optimizing the quality of life for smart city residents requires secure, accessible data collection.

With specific attention to our energy systems, even the smartest cities have much to gain from optimizing grid functions with clean and accessible distributed energy resources (DERs) — namely through regulation and adoption of residential solar + storage. This cannot be achieved, however, without overcoming some inherent challenges: bridging the gap between outdated infrastructure and advanced electrical technologies; implementing smart-city-supporting policy; and creating truly equitable clean energy solutions.

When the relationship between cities, utilities and citizens becomes mutually beneficial, a city — and its communities — can truly become smart.

A brief history of smart cities

As far back as ancient Rome, the throughline of each city across history that made significant contributions to our infrastructure systems can be considered a smart city blueprint. In those cases, each facet of society worked together to improve the overall quality of life. Artisans and aristocrats defied class expectations to contribute to the mutually beneficial collective, developing artworks that are universally recognized as masterpieces to this day. On an infrastructure level, ancient Romans understood that a well-designed road network was critical for the city’s success: trade routes, transportation and military movement all relied on efficient, reliable roads.

Enter the first electrical systems. In a short few hundred years, cities that once lit individual street lanterns were revolutionized by the advent of electricity. Thomas Edison’s own Pearl Street Station, which is considered the start of the electrical age, ushered in the concept of electricity for practical commercial use in 1882. In less than 150 years, the utility framework we still rely on came into being. The advent of electricity unlocked a vast array of new economic development opportunities that propelled society forward. But today that system is showing its age.

Back to the future

The electrical grid infrastructure we utilize today was built primarily in the 1960s and 1970s. According to the DOE, 70% of transmission lines are over 25 years old and approaching the end of their typical lifecycle. Additionally, our grid system gathers and monitors data in a centralized “producer-controlled” framework. As a DOE Office of Electricity study outlines, it was designed to support one-way power flow from a small number of large, centralized generation sources to customers. As originally conceived, the power grid was able to function with minimal end-to-end communications, as usage patterns were once predictable. This is no longer the case.

Increased communications bandwidth, the transition to intelligent software and the continuous addition of electrical devices and DERs result in a more complex grid supply and demand relationship; increasing less predictable demand with less reliable supply. Electricity and data are two sides of the same coin: as electricity flows, digital information can be collected, managed and analyzed. Although data cannot flow through electrical wires, the information is critical for the grid to predict and adapt to daily usage or changes.

Data capture is an essential piece to the smart city puzzle. Indeed, smart cities today use a variety of electronic data collection methods to optimize a city’s operations.

The digital divide

There is now a broad understanding of what’s known as the “digital divide,” where each player in our energy system does not have equal access to (i) how data is collected and (ii) how data use impacts end users. Arguably, it’s one of the major impediments to the electrical side of smart city adoption. The systems set up by the original utilities in the late 19^th century had no means of accounting for the technological advancements we use today. Short of crunching numbers in spreadsheets with utility bills, cities that attempt to smarten the process will use technologies such as automatic meter readings and wireless devices to transmit usage data.

Among the data challenges we’re currently facing are establishing secure communications pathways to prevent unauthorized access and/or attacks on data/systems. This also lends itself to the issue of data privacy; those whose energy is being monitored do not have full transparency about what the data purveyors are accessing. Data systems today are sophisticated beyond the means of the average individual. A truly smart city supports communities that are well informed as to where and how their data is used — and that starts with the technologies the smart city implements.

Smartening our cities with technology

There’s a myriad of electrical resources and technologies available to support smart city development. Here’s where clean energy systems enter the conversation: smartening a city requires an exit from harmful fossil fuel reliance and the development of renewable generation and storage that fully support grid capacity and function. Localization of these technologies is an important factor: both for the utility that can predict the grid’s weaknesses and potential outages and for DERs to support critical grid functions.

DERs are among the most effective tools for not only improving grid reliance, security and resilience but also supporting reliability for communities most in need of access to resources. Working in tandem with management systems, DERs unlock a more secure, diversified power system for a smart city, enabling the city (or asset owners within the city) to mitigate power outage risk, support electrification efforts and improve the overall efficiency of energy systems. DERs are commonly implemented behind the meter; homeowners installing rooftop solar + battery storage systems or who purchase an electric vehicle reduce their own demand and dependence on the grid.

Smart cities should encourage DER adoption via residential solar + storage; this is critical for achieving city and individual goals. While a city can implement solar arrays for its own buildings and functions, delivering the benefits of clean energy can be a much more individualized effort with support for home solar + storage installations. A home solar array + battery system unlocks many benefits: backup power, energy independence and reduced utility costs — for both single- and multi-family units.

As more homes implement smart technologies, such as electric vehicles, that place excess demand on the grid, the battery system’s intelligent software is another key component to managing grid resilience in front of and behind the meter. By acting as the energy management hub of the home, the battery’s software makes it possible to track, analyze and manage energy consumption so that the homeowner can optimize usage to their own needs. This also allows, if the system is connected to the grid, the homeowner to discharge excess stored solar to support the utility’s requirements when predictable outages or shortfalls occur.

As a behind-the-meter DER, home solar + storage must balance the need for residential energy resilience, overall grid stability and return on investment for the city or asset owner. While each side of the meter has the potential to support the grid’s function, current regulations place obstacles in the way of total collaboration.

Regulation

From a regulatory perspective, a lack of overarching legislative initiatives, whether statewide or federal, leaves much to be desired — although within the last several years we’ve seen steps in the right direction. Among the biggest organized pushes has been the Smart Cities and Communities Act of 2021, a collaborative effort between the U.S. Departments of Commerce, Labor and Energy to establish programs “for the implementation and use of smart technologies and systems in communities of various sizes.” The bill has not yet moved forward in the U.S. House of Representatives but is an encouraging signal for more smart city legislation in the future.

Where is the jumping-off point for cities that want to become smarter, and in turn, create smart communities? One step is to implement policies for installing the most DERs possible. This type of policy would require collaboration both in front of and behind the meter. Individuals with solar + storage capability should be able to discharge and deliver excess stored solar to their neighbors, facilitated through utility-managed infrastructure. However, a major pain point is third-party ownership. State legislation is required for the adoption of expanded financing options for solar systems, such as power purchase agreements or non-traditional consumer loans.

When an individual installs solar + storage, they should be incentivized to generate as much solar capacity as possible. In conjunction with the utility storing, managing and utilizing the excess solar, they are better able to help neighborhoods when grid outages occur. Currently, some states have programs that financially incentivize discharging excess solar via tax credits, such as California’s DSGS program. The ability to create networks of DERs not only supports the grid but also boosts smart community building.

Creating community

At the end of the day, each player is dependent on our energy system and resources. As citizens, it’s not only our job to help smarten our cities but to foster smart communities. In an ideal world, neighborhoods could be connected via DERs — the power one home generates could power another home in the same vicinity when their lights go out. If we become able to distribute our energy resources in this way, we can also support critical applications when the grid fails, creating a more energy-resilient community. When there is an outage, hospitals, first responder stations and other critical facilities would either be able to utilize the discharged power from individual DERs or the utility can (as they already do) prioritize these applications and communicate to DER owners to use their power reserves.

There is a caveat: a well-functioning grid from which each user can receive energy, regardless of socioeconomic status, is arguably “less smart” when only certain citizens can mitigate the risk of a power outage. DERs are not always financially within reach for people in rural areas or those in multi-family urban units. When power outages occur due to extreme weather conditions, excess demand, or even an unplanned event, rural homeowners are often the last group to have power restored.

We can all come together as a part of a smart city solution when individuals and utilities mutually benefit from DERs. This is how to build truly energy-resilient smart cities.

Equity through energy resilience

Even the most innovative business models that seek to bridge the energy equity gap when developing a smart city are focused in front of the meter — where their options are limited. Taking agency over one’s energy consumption behind the meter is possible via solar + storage systems, but the traditionally cost-prohibitive nature of the systems prevents homeowners most in need of affordable, reliable energy from accessing it.

One method is implementing Home Power Programs (HPPs), which enable access to solar + storage for underserved communities via power purchase agreements. In this model, a technology provider partners with a city, municipality or community organization to deliver zero-up-front-cost solar + storage systems to the area’s low-to-moderate income (LMI) communities. An HPP is an opportunity for a city, municipality or community organization to navigate the intersection of local and state government policy on DER projects. If the city participates in an HPP or similar program, they can start to encourage policies that reward or incentivize the largest potential installations of solar behind the meter, to begin with. Ideally, this will help utilities understand behind-the-meter grid support potential. If solar + storage systems can discharge excess stored solar back to the grid, the effort can be organized and managed when the utility expects an outage or increased demand.

HPPs have to exist within the regulatory framework within which our cities operate. We need to examine both perspectives: how do both utilities and individuals create a long-term value proposition that supports smart cities and communities? Although the primary goal of HPPs is enabling reduced reliance on the grid, by creating networks of DERs you are in essence helping alleviate peak loads with additional capacity. Being behind the meter acts almost as a shield against regulations that negatively impact individuals. Cutting reliance on the grid enables near-complete energy independence.

A key element in the conversation is accessibility — how can a city be fully smart if not all residents have equitable access to the technologies that can improve their everyday lives? The answer is enabling HPPs for LMI communities. By removing the barriers of traditionally cost-prohibitive solar + storage, LMI communities can reap the benefits of clean, affordable and reliable energy that would otherwise be inaccessible due to financial, geographical or socioeconomic restraints.

A smart city is not just defined by its technological advancements — it's the improved quality of life for its communities. Smart cities past and present enhance the quality of life for residents not only because of technological advancement but because those advancements can benefit each member of society. Technologies supporting our current electrical infrastructure, namely residential solar + storage, when distributed widely and equitably, unlock mutual benefits for utilities, households and cities.