Your home can help solve the growing demand for AI

The AI ​​boom has a big problem. Tech companies say they need to quickly build lots of new energy-intensive data centers for AI development, but the energy industry typically takes years to build power plants, solar farms and battery installations.

Three companies that install and manage rooftop solar panels, home batteries, smart thermostats and other devices say they can solve the problem by connecting the devices — mostly those that control, generate or store energy — in millions of American homes and apartments.

The companies are Tesla, a maker of electric vehicles and batteries; Sunrun, the nation’s largest solar and battery installer; and Renew Home, a Google spin-off that manages home thermostats and other devices. On Wednesday, they plan to announce that they are working together to free up enough electrical capacity to meet the needs of 17 large data centers during periods of high demand.

For example, after getting individuals to sign up, companies could use software to direct thousands of consumers’ home batteries to charge when there’s plenty of solar power, then release that power after the sun goes down. Making more power available in the evening, when demand rises, would reduce or eliminate the need to add large power plants next to new data centers.

“It takes a lot of time to build a solution at scale,” said Mary Powell, CEO of Sunrun, which once operated the Vermont plant. “We’re sitting on a solution right now.”

Utilities generally have enough spare capacity to serve new data centers most of the time, but not where electricity demand is very high, including hot and cold periods. For years, energy and technology executives have struggled with how to power data centers when networks are under pressure.

Building new power lines and power generators, including natural gas plants or solar farms, can take years and cost billions of dollars. And under current federal and state rules, those costs are usually passed on to everyone who uses electricity, including individuals, on their monthly electric bills.

Sunrun, Tesla and Renew Home say at least some of that new spending isn’t needed or could be delayed for years. Home energy devices can be effectively linked together to serve as a virtual power plant, in industry jargon. But unlike actual power plants, these systems can also store or use energy. Thousands of thermostats can be adjusted a notch or two to reduce or increase energy consumption, depending on what is best for the network.

Some states, like California, have programs that already work along the lines of what the three companies are proposing. But the companies would have to convince utilities, grid operators and state regulators across the country to work with them to achieve the goals they’ve outlined.

“It’s really a paradigm shift with the way we operate the electric system,” said Leah Stokes, an associate professor of political science at the University of California, Santa Barbara, who specializes in energy and environmental policy. “Maximizing these smart devices is a huge way to unlock value across the network.”

Dr. Stokes said the California program provides the equivalent capacity of a nuclear power plant or enough capacity to run a large data center. Sunrun, Tesla and Renew Home said their private partnership could provide 16 times more electric capacity than California’s program across the United States during periods of high demand and be up and running within months.

“We have eight million devices registered in six million homes,” said Ben Brown, chief executive of Renew Home, which manages thermostats, water heaters and other devices. “That alone is so big. It helps the challenge.”

Another benefit: When companies use home appliances, individuals receive cash payments or credits on their electricity bills. Last year, Sunrun and Renew Home paid out $67 million to individuals.

Last June, when demand for electricity was high, Sunrun directed about half the capacity of the 130,000 rooftop solar and home battery systems involved in the distributed generation program to help grids in California, New York, Massachusetts, Rhode Island and Puerto Rico.

Hiring individuals to help the grid and paying them to do so may also help alleviate some of the public anger directed at data centers and large energy projects. In some parts of the country, governments have banned or imposed severe restrictions on new data centers, solar farms and large battery installations.

Data centers can use as much electricity as a medium-sized city. And some estimates predict exponential growth in energy demand from these centers as the United States competes with China to dominate artificial intelligence.

Last week, the federal energy regulator introduced guidelines that would allow data centers to connect to grids more quickly if they reduce electricity consumption when grids are under voltage. The directives also aim to protect individuals from rising energy bills by requiring better disclosure of the costs of new investment in the grid.