Key elements include:

• Intelligent networks: Two-way "internet like" networking equipment and software, usually using wireless communications. These communications utilize standard protocols such as IEEE 802.11 and IEEE 802.15 to ensure compatibility and interoperability. The network extends from inside the home to the electric meter or nearby power pole through a series of data concentrators, and eventually through the internet. The system combines private communications for utility operations and public, but secure, communications to allow consumers to interact with their energy control devices remotely.
• In-home devices: Smart thermostats that can be adjusted remotely by the utility, or the consumer to save energy during peak loads, high-energy prices, or changes in renewable energy production. Thermostats manage up to 40% of household energy use and with proper controls and programming, can save 10% to 30% per year in heating and cooling costs, a total of over $300 per average home, or over $25 Billion per year in the U.S. (Data from EIA). In-home energy displays inform customers of their energy usage and cost in real time, and can communicate urgent messages from the utility. These have been shown to save an additional 5% of electricity use, or over $4 Billion per year. Load control switches can be connected to pool pumps electric water heaters, and other loads, saving an additional several percent of energy usage. There are already several million-load control switches installed in the U.S. by utilities over the past twenty-five years.
• Grid monitoring and control devices: Transformer monitors, voltage sensors, and other devices help provide a more rapid response to power outages, and allow better coordination of the grid in response to renewable resources, solar, and distributed generation.
• Electric vehicle integration: Vehicle connection stations supporting safe delivery of power to vehicles which draw as much as five homes, vehicle identification for billing purposes, and the coordination necessary to let vehicles serve as batteries and backup power for the grid.

"The need for two-way communication between the utility and its customers lies at the heart of all Smart Grid initiatives," said Ahmad Faruqui of The Brattle Group. "Such communication allows dynamic pricing to be transmitted to customers and it also enables customers to automatically curtail usage during critical hours and to shift energy consumption from high-priced peak periods to low-priced off-peak periods. In this fashion, both parties work synergistically to manage the cost, delivery and environmental impact of power generation and energy services delivery. I applaud the work that companies like Trilliant are doing in this area. They are bringing that day closer when all customers will start to benefit from the Smart Grid."

• Consumers: By providing information on energy use in real time, and by providing controls that are both more advanced and accessible from any location, consumers will be much more able to reduce their energy consumption, carbon footprint, and energy costs. Today's consumers have no "gas gauge" or "gas station price" to inform their home energy decisions. It will be essential to provide these tools to consumers if we expect to make significant progress on energy efficiency.
• Utilities: Utilities need the Smart Grid to support increasing penetration and use of solar, wind, energy storage, and other clean energy technologies (especially "intermittent" and distributed generation), to be able to provide high quality, reliable power to drive economic growth, to properly bill their customers and implement Federal, State, and Local policy initiatives, and to avoid the construction of unnecessary fossil fuel fired generation and new transmission.
• Communities: Increasingly, real or virtual communities, such as cities, universities, major corporations, and even community based or national groups, are coming together to reduce their energy use, integrate the energy use with renewable resources. These entities need a Smart Grid to have visibility, control, and coordination of their efforts to comply with environmental and economic initiatives, whether driven by regulation, or by their own sense of civic or environmental duty.

• The Smart Grid is essential to achieving aggressive energy efficiency and renewable energy goals. Therefore, funding of initiatives to promote efficiency and renewables should include support for the Smart Grid technologies that will be foundational to their success.
• Implementing smart meters and time-of-use prices is important—but not enough. Achieving the full benefits and energy savings will require providing customers with other components of the smart grid including in-home tools and devices to manage their energy consumption proactively and automatically.
• As with the Internet, open standards and interoperability—rather than proprietary technologies— are crucial to efficient and widespread use of the smart grid including plug-and-play integration of new and innovative devices to come. With this architecture obsolescence can be avoided, and the benefits of smart grid investments today will be reaped for decades to come.