In May 2015, Elon Musk revealed the Tesla Powerwall -- a stationary battery for homeowners that features essentially the same battery technology as Tesla’s cars. Energy analysts pored over the specifications of the lithium-ion technology because of the promise it has to impact both transportation and electricity markets.

For most observers, the salient detail was the Powerwall’s price. Weighing in at $350 per kilowatt-hour, all-in -- well below the industry’s expectations for battery cost evolution -- the device raised a lot of eyebrows.

What intrigued us most was that the Powerwall is clearly conceived as a consumer product. While its sleek design and hyped launch felt totally natural to those accustomed to following Apple, it served as a wakeup call to the energy industry: energy is being consumerized.

It’s remarkable that fans went nuts over the launch of a battery -- a technology that usually just enables something interesting (like an iPhone) rather than being interesting in and of itself. Energy, the basic foundation of our prosperous lifestyles, is moving away from centralized power plants and closer to the customer. And customers choose winners and losers in radically different ways than do utilities or the other incumbents of the energy industry.

This disruption and consumerization of energy is being driven by a number of accelerating trends:

  1. The shift from a centralized to a more distributed energy system architecture
  2. The global drive toward lower-carbon energy
  3. The rollout of the internet of things
  4. Developing countries leap-frogging conventional power grids to consumer energy

From centralized to distributed energy

As Amory Lovins and I wrote about in 2010, the power markets are clearly shifting away from cathedral-like coal and nuclear power stations toward modular, mass-producible, and highly scalable micropower technologies -- renewables, likesolarand wind, and efficient combined-heat-and-power systems (mostly fueled with natural gas). The ascendancy of micropower is democratizing the future of the energy system, enabling everyone from individual homeowners to commercial and industrial customers to quickly select and obtain a portfolio of distributed solutions, avoiding the decade-long approval processes required to build multibillion-dollar coal or nuclear power plants.

The decarbonization of energy

The Paris climate agreement made at least one thing clear -- the world intends to shift toward a lower-carbon energy system. Technologies like rooftop solar and home batteries can significantly contribute to decarbonizing the power sector. Having just committed to emission-reduction targets on the global stage, governments around the world will find it hard to side with incumbents to slow the adoption of these consumer energy technologies. In fact, governments will likely promote them, further accelerating the consumerization of energy.

The internet of energy

The internet of things is moving out of a phase characterized by hype and uncertainty into one of scale and impact. Many sectors will be impacted, including energy. A proliferation of sensors and controls will enable an intelligent and resilient energy system made up of myriad distributed energy resources. The internet of things will also create a platform for new business models that derive additional value from distributed energy resources for both customers and energy markets.

Leap-frogging energy

In countries like the U.S., we are slowly seeing a transition from the old energy system to the new. In contrast, developing countries in Asia and Africa are more often leap-frogging the centralized power system and going straight to consumer energy. Tired of waiting for a centralized solution to reach them, customers in countries as varied as Kenya and Nepal are choosing to purchase consumer solar-plus-battery power products from M-Kopa or Empower Generation. For many families and communities in these regions, their first experience of reliable electricity will come from a solar panel on their roof and a small battery on their wall. Though on a smaller scale, these are the same essential technologies and concepts behind Tesla’s Powerwall.

The consumerization of energy is just beginning, and it represents a profound shift in the way we power society. Opportunities abound for entrepreneurs and investors, but most of all for consumers of energy.

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Bennett Cohen is a senior investment associate with Shell Technology Ventures and chairman of Empower Generation.