First it was the slew of bad news last year about SmartGridCity in Boulder, Colorado. Designed to showcase the transformative power of Smart Grid technologies, the project has been plagued by cost overruns and unmet expectations. Then in September, Google pulled the plug on its Google PowerMeter program, which was intended to help consumers track and visualize their energy consumption. And, one need only talk with people in the energy industry to sense widespread disappointment that early forecasts of Smart Grid technology sales have failed to materialize.

So what’s happening here? Is the Smart Grid one of those ideas that sounds great in theory but is doomed to fail in practice?

The short answer is absolutely not. Several factors have contributed to slower-than-expected growth in Smart Grid technologies. But ultimately, the reality is that the Smart Grid represents a profound change in the way people do things, and it’s just not going to happen overnight.

Regulatory Issues

Believe it or not, one of the biggest culprits in stagnating Smart Grid investment has been the Smart Grid grant awards created under the 2009 stimulus package. While this funding was intended to spur new investment, in practice it often had the opposite effect.

Once the possibility of billions of dollars in federal funding presented itself, all independent Smart Grid investment effectively screeched to a halt while businesses and utilities rushed to apply for funding. Additionally, it has not always been clear what strings would be attached to federal money (for example, whether utilities would be held to mandatory baselines for renewable energy sources). The end result was that many Smart Grid projects languished while these details were hammered out.

Lack of Urgency

Another factor in slow Smart Grid implementation has been the lack of a driving need to bring these solutions online. In some markets, especially developing regions in China, Smart Grid rollouts are proceeding at about the rate analysts expected. Why? Because there is a pressing need for a modern energy grid in these regions, and it just makes sense to build it with Smart Grid intelligence.

Here in the United States, we are in some ways victims of our own success. While Smart Grid intelligence may be necessary to meet long-term consumption needs, right now most of the country is reasonably well served by existing infrastructure. It doesn’t take six months here to run power to a new business. We can reasonably expect that when we plug something into an outlet, power will be available. So the urgency just isn’t there.

Evolutionary Change

The biggest factor in slow Smart Grid growth, however, is simply the scale of the change it represents.

Consider the idea of the “paperless office,” first envisioned in a 1975 article in BusinessWeek by George E. Pake, then head of a Xerox think tank:

“I’ll be able to call up documents from my files on the screen, or by pressing a button,” he says. “I can get my mail or any messages. I don’t know how much hard copy [printed paper] I’ll want in this world.”

The vision was prescient, but the timing was off. Pake predicted most offices would be paperless by 1995. In fact, in the 90s localized printers actually led to more paper. It wasn’t until the last decade, when network and digital technologies reached full maturity, that the paperless office became a reality for the average business.

Like the paperless office, the Smart Grid is not just a good idea, it’s inevitable. The benefits are simply too great to ignore. But getting there will require major changes, not just in infrastructure but in the fundamental ways we think about power consumption. This will be a cultural change, possibly a generational one, and it’s just going to take some time.

What do you think?  Do you see the Smart Grid taking off?  What cultural changes do you believe need to take place for it to be fully embraced?  We look forward to hearing your ideas.