The (Near) Future Of Homes - Are You Ready?

It's hard not to hear about the prevalence of electric and self-driving cars these days. Elon Musk, CEO of Tesla Motors recently announced what they dubbed, "Master Plan, Part Deux".

You might associate Tesla with cars only, but they're making a big splash into the world of houses as well. These changes will have a significant impact as well on 2-unit homes, in addition to higher density housing developments - a current mandate from our policymakers.

But first, let's go over the Tesla plan if you're not familiar with it. Here's Part 1 of their master plan, written ten years ago.

  1. Create a low volume car, which would necessarily be expensive (The Roadster)
  2. Use that money to develop a medium volume car at a lower price (Model S and X)
  3. Use that money to create an affordable, high volume car (Model 3), and...
  4. Provide solar power. (Solar City)
Delivery of the Model 3 and acquisition of Solar City completes Part 1 of Tesla's master plan - Photo: tesla.com

Delivery of the Model 3 and acquisition of Solar City completes Part 1 of Tesla's master plan - Photo: tesla.com

With expected delivery of the affordable Model 3 in about two years and the acquisition of Solar City, these objectives are meeting their targets, and so it's time for Part Deux (1).

  1. Create stunning solar roofs with seamlessly integrated battery storage
  2. Expand the electric vehicle product line to address all major segments
  3. Develop a self-driving capability that is 10X safer than manual via massive fleet learning
  4. Enable your car to make money for you when you aren't using it

I'm really interested in item 1, "Create stunning solar roofs with seamlessly integrated battery storage". Basically this means it will be super easy to have a solar PV panel installation integrated with their home battery (The Powerwall). This will change houses in a BIG way.

The Zoning Shift

It's a trite statement, but technology has compounded exponentially in the past century. Home systems and components, however, have only increased linearly and incrementally with slight efficiency improvements. How homes have been built has not changed much due to cheap oil, and we're still living under the momentum of mid-century Euclidian zoning. The mandate of the time was low-density urban sprawl, heavily focused on the segregation of districts (2).

Additionally, how homes are built and maintained are still incredibly inefficient and wasteful due to extreme industry fragmentation of the systems and components that are still used today.

New low density construction projects will be less prominent in the future

New low density construction projects will be less prominent in the future

2 major factors will cause a major shift in the near future:

1. The first is socio-economical. Dwindling resources, eroding affordability, massive urban in-migration, and policies trending toward densification of the urban core.

2. The second is technology. Innovations like "Smart home" technology, sharing economy tools, and the Internet of Things (IoT) will shape how homes are built, maintained, and even used.

At the forefront of this change is Tesla's acquisition of Solar City.

Solar panel installations up until now are largely a mom and pop industry, with local dealers and installers servicing their own geographic location. Tesla's merger with Solar City, and the economy of scales that will come out of the massive Gigafactory in Nevada will mean that batteries for both cars and homes will be something very affordable and ubiquitous.

It's very possible in a few short years, you'll be able to go to Tesla's website, punch in your coordinates, and have the exact number of panels, a home battery, and a car delivered to your front door and installed in a matter of days.

So what will this seamless solar solution ultimately mean for houses?

1. Less Reliance On The Grid

Here in Ontario, our aging hydro and nuclear infrastructure for electricity generation is very much a problem, and the government does not have the capital (without taxing us to death) to renew or build new (3).

This is part of the reason for the Feed-in tariff programs where they're paying the private sector more money to produce electricity than they are charging.

At the end of the day, less reliance from our grid is a good thing. There's less waste from the transmission of electricity from the hydro dams or power plants to our homes, and we're also better insulated from major power outages.

2. Less Reliance On Other Utilities

The average house uses about 10,000 kilowatt hours of electricity in a year. A 10 kilowatt solar panel installation can easily supply this demand (4).

Greater efficiency in systems (lights, appliances, electronics, air conditioners) can significantly reduce the demand and allocate excess electrical supply to other utilities. This may be in the form of using additional capacity for electric furnaces and water heaters instead of gas systems. This might also integrate well with geothermal systems, where excess electricity can help supplement the heating and cooling loads.

Photo: howstuffworks.com

Photo: howstuffworks.com

The big issue with solar is that you need to use the electricity immediately, and don't have it when the sun isn't shining. Home battery technology might be the solution once the costs comes down, and you can potentially have a fleet of batteries on your garage wall supplying all of your home's electrical needs.

Excess power can also help treat grey water (using waste water from sinks and showers to flush toilets or irrigation). Currently our standards don't allow grey water to be used in the toilets without being treated first.

I stayed in this Airbnb in Japan - common to have a sink above the tank filling it and re-used for flushing

I stayed in this Airbnb in Japan - common to have a sink above the tank filling it and re-used for flushing

Reducing water use will have the immediate benefit of saving you money. Looking through my own water bills, it looks like costs for water have gone up about 10% year-over-year the past few years. Has your salary gone up 10% year-over year?

Secondly, reducing the amount of water in our sewer systems reduces the stress of additional units of homes in a given area.

3. Great potential for multi-unit properties.

This is the one I'm particularly interested in. As we continue to intensify our existing single family homes to 2 units, triplexes and even quad-plexes, we might not have adequate electrical infrastructure to meet the demand of all of those additional units.

You might be able to have the original home on the existing 100amp electrical supply, but additional smaller units might be capable of being served by a combination of solar PV panels and home batteries.

This can create more autonomous units that are more accountable for their energy consumption, without having to create separate electrical meters. This is a great solution for investors renting out their properties, or even homeowners who might have a tenant in a secondary suite.

4. Integration With A Smart Home Solution.

 It makes sense that this combination solar and home battery system is integrated with some type of smart home hub, seamlessly connecting with all of the other systems and components of the home.

This will make sense for all the electrical systems, such as lighting, home appliances and electronics, but it's also logical for other large appliances we discussed earlier as well, such as heating and cooling systems.

Examples may be integration to the Z wave home control system, Samsung's Smart Home solution, or any number of things not in the market yet.

Amazon is also doing some very interesting things in this area with their Alexa product (think Siri for the home). Quite possibly, Tesla might even have their own proprietary home management system.

Playing Catch Up

All this might sound far-fetched at the moment. However, when it comes to homes, we are simply playing catch-up to all the advances that have happened.

Technology and economies of scale will eventually (I feel sooner rather than later), consolidate the much fragmented industries associated with home building, maintenance, energy consumption, repair and replacement.

Question is - Are you going to welcome it or resist it?

Powerwall and Model S - Photo: tesla.com

Powerwall and Model S - Photo: tesla.com

Notes:

  1. Tesla Master Plan Part Deux - https://www.tesla.com/blog/master-plan-part-deux

  2. Transportation Research Board, The Costs of Sprawl Revisited, 1998, http://onlinepubs.trb.org/onlinepubs/tcrp/tcrp_rpt_39-a.pdf.

  3. Aging Electrical Infrastructure In Ontario - http://powerforthefuture.ca/the-value-of-electricity/electricity-pricing/pricing-factors/aging-infrastructure/

  4. How much electricity does an American home use? - https://www.eia.gov/tools/faqs/faq.cfm?id=97&t=3