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A report published by the United Nations’ Environment Programme (UNEP) revealed that buildings account for 37% of global operational energy and CO2 emissions. Our homes make up approximately 20% of this figure.
Right now, most homeowners and renters probably operate as this writer does: taking a little care about when to fire up the boiler, remembering to flick off light switches, and groaning when the utility bill comes through.
This is especially true as prices continue to rise. Retail electricity bills in the U.S. are expected to grow by 2% in 2025, a pattern repeated across the globe. In the UK, the average annual household fuel bill rose from around £1,100 ($1,240) in 2021 to an estimated £1,738 ($2,165) in 2025.
What if our homes could run more efficiently by strategically managing energy loads? How long until we see artificial intelligence operating at a grid level and within our homes?
Techopedia spoke with Schneider Electric, a Fortune Global 500 company focusing on digital automation in the energy sector, about what governments, companies, and individuals can do to keep costs low and whether AI will help us achieve this.
Key Takeaways
- AI tools are coming in that can cut energy bills by optimizing a home’s energy usage.
- Most people have a knowledge gap when it comes to understanding their energy use — HVAC and EV chargers use far more power than lighting.
- Smart homes can sell excess energy back to the grid, becoming nodes on a network rather than consumers.
- Governments are pushing energy efficiency policies slowly but steadily.
- Will consumers welcome AI in their homes? That might prove to be the most resistance on the grid.
How Can AI Help Make Electricity Supply Cheaper & More Effective?
Is AI the power tool that can crunch through rising energy costs, decarbonization goals, and day-to-day consumer needs?
According to Michael Lotfy Gierges, VP of Schneider Electric’s home and residential business, AI is already changing how homeowners manage everything from climate control to electric vehicle (EV) charging.
The question is whether the emerging tech can return money to consumers’ pockets while building a more sustainable energy ecosystem.
Gierges explains that while many assume turning off lights is the biggest saver, large appliances like HVAC systems or EV chargers are often responsible for half a home’s overall consumption. This knowledge gap is critical.
He said:
“We’ve asked thousands of people what their most significant energy consumption is in their homes. Most thought it was home lighting, so everybody was walking around and switching lights off.
“Even with LED technology, lighting only represents 5 to 7% of your energy consumption. However, their electric vehicle and HVAC could use 60% of the energy.”
Gierges points out that this power of knowledge can help homeowners save up to 15% on average annual energy consumption — especially if AI sits in the background:
“Energy monitoring is a great deal, and then, of course, the next big deal is behavioral insights. AI can provide insights into the occupant’s behavior and develop tailored strategies to minimize energy waste and maximize efficiency.
“And not only that but also work out the timings and what energy tariff you’re on — that is the cohesive experience that I’m talking about.
“And most importantly, it can help you make a little continuous improvement, [chuckles] both in ourselves and our own self-development — but also on our energy consumption: getting 1% better every day.
“And it gets you really consistent by understanding, learning, and adapting: it allows the technology to grow with the consumer and their changing habits.
“So when you change a habit, the system will understand and will help you refine that energy management strategy that’s running in your home — and growing with more and more efficiencies, especially with dynamic tariffs going on at the same time.
“For example, one day, the sun is shining perfectly, so you produce a lot of power via your solar panel and store it in the battery.
“And when the energy pricing is high, you’re not going to charge a car battery from the grid — you’re going to charge it from the battery.”
Power Your Neighbors While Governments Tackle Sustainability
As Gierges says, the long-term dream is a future where homeowners both consume and generate energy and redistribute it back to “virtual power plants.”
In that vision, an AI-driven home might sell excess solar energy back to the grid or share it with neighbors — earning revenue for the homeowner while lightening the grid’s load.
Gierges added: “Electricity prices have been consistently increasing over the past four and five years, not just since COVID started, but with the whole geopolitical situation in the world, oil prices fluctuating and so on.
“So energy transition is not just about the carbonization and sustainability, it’s also about putting money back in consumers’ pockets.”
Cost is not the only factor; today’s energy challenges go far beyond occasional spikes in utility prices. Government initiatives — from the U.S. Inflation Reduction Act to tax credits in France — show a growing global alignment on decarbonization.
Gierges admits we’re still “scratching the surface despite the enthusiasm.” Government funding, such as the U.S. Department of Energy’s $8.4 million for grid-enhancing AI, remains inconsistent.
Integrating AI with utilities also involves complex negotiations over data sharing, privacy regulations, and dynamic pricing rules that differ by region.
Gierges added:
“I would like to give credit to governments. We often criticize them for not doing enough. But for the first time, not just in the U.S. but across the world, including Saudi Arabia and UAE, are taking sustainability, decarbonization, and energy efficiency to a level that we have not witnessed before.”
Gierges says that these policy boosts encourage more manufacturers to accelerate innovation and help reduce the payback period for consumers adopting bright panels, solar solutions, and battery storage.
Yet incentives alone won’t close the gap between abstract sustainability goals and everyday household anxieties over electricity bills.
For Gierges, effective AI solutions must begin by providing essential visibility into how and when electricity is used. If you don’t know where the bulk of your energy is going, you can’t reduce it meaningfully.
The Bottom Line
Electricity supply has been a bit of a blunt instrument over the last 100 years — not to take away from how magical a journey it has been, with most of the world able to access power at the flick of a switch.
But a blunt instrument can be wasteful, which is why governments and organizations like Schneider Electric are focused on efficient hardware and using AI to manage how we use it almost invisibly.
That level of integration will eventually turn the average house into a dynamic node in the energy network — predicting usage, engaging in real-time price arbitrage, and, if you choose, selling power back to the grid.
The bigger question is whether these innovations will achieve mainstream adoption. Or will uneven incentives, regulatory hurdles, and consumer hesitancy slow the shift to fully autonomous energy management?
That’s the next problem to power through.
