A home energy management system (HEMS) optimizes how your home uses energy, helping to keep your bills down and your home comfortable. For homes with solar-plus-storage, a HEMS uses real-time data and automation to determine the best times to store and discharge power, maximizing the benefits of your free, clean electricity.
To put it another way, a HEMS ensures that your solar energy goes further. If there's an outage, your utility prices increase, or your area experiences a freak weather event, you still have access to a free electricity supply that can power your most important appliances for as long as possible.
Here's a closer look at the full benefits of a HEMS and what you should consider before installation.
A HEMS monitors household energy data, such as the amount of energy you use and when, as well as external factors including utility rates and the weather, to make forecasts and recommendations and automatically adjust your electricity usage. If your HEMS sees the cost of electricity rise, for instance, it can automatically turn on your battery, or it may recommend switching off devices that use a lot of power.
HEMS have two main parts:
The hardware, which is usually a smart panel, centralizes communications and the transmission of data between the energy management system, your appliances, and you.
The software, such as an app or web portal, allows you to monitor and control the energy consumption of all the connected devices in your home.
The hardware is installed at the main electric panel of the house, where it relays information from the panel to the software. It can either replace your existing electrical panel or become an add-on.
Most HEMS enable you to monitor data such as the amount of energy being used and when, the amount of electricity consumed by specific appliances, how much power your solar panels are producing, and the amount of power stored in your battery. It also tracks historic data to show trends and patterns in energy behavior, which it uses to forecast future usage.
As David Lopez, national sales manager for solar & storage at Panasonic North America, explains, this brings big benefits. "Essentially, this means that you can control and prioritize your energy usage based on how much energy is available from your solar panels or the cost of the electricity at that time," he says.
A HEMS makes managing your household energy consumption quick and easy. Because it continually scrutinizes your data, a HEMS learns your unique energy patterns and preferences and uses that information to make adjustments on your behalf. It will also recommend additional ways to improve your home’s energy efficiency.
A HEMS also gives you greater control over your energy usage with recommendations and real-time forecasts. You can use these to prioritize which appliances to use and when, based on data such as the energy consumption of each appliance, the amount of power being generated by your panels or stored in your battery, and the price of electricity from the grid.
"Another benefit of having real-time forecasts is that it helps to reduce carbon emissions by making your home smart and efficient," says Lopez. "Consider charging your EV when the sun is high and carbon emissions are low."
Using HEMS software, you can see how much energy your panels are producing at any point in time, how much each appliance is using, and the amount of power stored in your battery. This means you can prioritize and control which appliances are running to ensure your free solar power lasts for as long as possible.
A HEMS also gives you more flexibility in how you use stored energy in your battery. Batteries typically don't have enough capacity to power your whole home for very long. Instead, you preselect which appliances are the most important for your battery to power. With a HEMS, however, you don’t have to preselect anything — you can choose which appliances you want to run on the battery at any time.
A HEMS shows how much electricity your home and appliances use — and when — which can help solar installers design a solar system that's right for your home. By understanding your household's energy requirements, an installer can more accurately size your solar system and battery capacity to fully cover your needs. And with greater clarity on which appliances you use most often, you can better determine which appliances to connect to your battery.
A HEMS can decide when to tap into your solar power based on local energy prices and will automatically switch your appliances to battery power when prices rise. This is particularly valuable if you live in an area with time-of-use rates (ToU), where electricity prices rise when demand for power peaks to encourage residents to curtail their use. TOU rates may vary based on season, on day of the week (weekdays vs. weekends/holidays), or time of day. A HEMS makes quick energy-use decisions on your behalf so that you don’t have to micromanage and keep track of electricity prices all the time.
If you live in an area that experiences regular power outages, extreme weather events, or even changeable weather patterns, a HEMS can ensure your solar energy keeps the lights on for as long as possible. For example, a HEMS can automatically adjust how your home uses energy to conserve power — it will also show you which appliances are draining the most electricity and how much power is left in your battery so that you can prioritize which appliances to keep on.
In addition to incentives for solar and battery installations, the Inflation Reduction Act (IRA) includes three main federal incentives for home energy management systems:
High Efficiency Electric Home Rebate Act: This offers up to $14,000 in rebates for low- to middle-income households for projects that improve energy efficiency.
Energy Efficient Home Improvement Credit: This provides up to $1,200 in annual tax credits for homeowners who improve the energy efficiency of their homes.
Residential Clean Energy Credit: Otherwise known as the investment tax credit, this offers a 30% tax credit for solar and storage installations. If you include HEMS, it may also be covered under the credit.
Some states also have their own incentives, so it's worth checking with state governments and your utility to see what’s available where you live.
For Lopez, HEMS are only going to grow in importance. "As electrification continues growing, it will be critical for homeowners to understand how and when the energy is being used," he says. "When you charge your electric vehicle or when you put your laundry will have an impact on your monthly bill. That’s why HEMS will help homeowners shape their energy consumption to be as optimized as possible."
If you have solar-plus-storage or are considering installing a solar-plus-storage system, a HEMS will help you make the most of that investment, simplifying your home energy management with data-led decisions that keep your bills down and your home as comfortable as it can be.
When you’re ready to take the next step to make your home more energy efficient and independent, Panasonic has the tools and resources you need to get started.