The Inflation Reduction Act (IRA) represents America’s most significant investment in clean energy. This law accelerates the transition to renewables, involving huge upgrades to energy infrastructure and grids; implementing it is no simple task.

Open source is mentioned only once in the IRA, requiring open-source monitoring tools to track “weather-normalized energy use of a home before and after the implementation of a home energy efficiency retrofit”. This requirement of the $4.3 billion grant to states for home energy efficiency improvements is essential for consistent, transparent evidence that impacts were real. This will help create more flexible and scalable grids utilizing virtual power plants.

Open-source software is code released openly and transparently under a permissive license, where the holder grants the ability to review, alter, share and use the software for any purpose. It is developed under a collaborative model, where individuals from multiple organizations, often competitors, work together to build technologies more quickly, efficiently, and with higher performance and innovation than could be achieved otherwise

At minimum, policymakers should require that for a solution to qualify as open source under the IRA it must be governed under a permissive license and have code that is freely available for use, sharing and modification. Commercial products built on open-source codebases with proprietary interfaces or features and enterprise support offerings can be considered open source so long as they follow the requirements of the relevant license. Which parts of software need to be open source to facilitate transparent market transactions may depend on the use case; for example, math involved in measurements needs to be open and transparent, whereas methods for optimizing data flows do not.

Why Energy Needs Open Source

Open source is essential to providing transparent, consistent measures of performance that can animate the home energy efficiency deployment market. However, the value of open source extends well beyond home energy efficiency. Decarbonization requires digital transformation across all parts of the energy industry. The technologies required cannot be built by any organization alone, and traditional “black box” approaches with exclusive proprietary software used in the energy industry will not work for this new era. Those can lead to different standards for measurement, meaning utilities may be judged on different measures. Open source prevents this.

Best Practices for Open Source

Software vendors sometimes post code on GitHub or release research reports into the fundamentals of proprietary software and call it open source. Such actions do not make it so. It is crucial to consider licensing, which should be permissive and not place restrictions on use. Popular licenses require transparency and sharing improvements or modifications made to the code. Common open-source licenses include the GNU Public License (GPL), the MIT License, and the Apache License 2.0.

Open-source development should be governed by neutral committees. Foundations such as the Linux Foundation and Apache Software Foundation exist to accomplish this. Governing boards and technical steering committees should include stakeholders from diverse backgrounds, including different organizations and geographies. Many open-source projects start as proprietary and are then donated by their creators to a foundation to add contributors, increase adoption, and accelerate innovation.

Case Study: California Public Utilities Commission

California is an innovator in transforming energy and provides an example of best practices for the use of open source. California recently faced periods where energy demand outstripped available supply, leading to rolling blackouts. The governor created a Market Access Program to improve grid reliability. The program uses LF Energy-member Recurve’s FLEXmarket model to track savings of projects monthly at a site level, then for payment at the portfolio level. Aggregators can track projects' savings. Calculations are open source with market rules guided by the CPUC Normalized Metered Energy Consumption rulebook.

LF Energy’s OpenEEmeter project enables calculation of baseline models and counterfactuals. GRIDmeter allows comparison group sampling and savings adjustment. FLEXvalue calculates grid value based on measured hourly savings impact and the CPUC’s avoided cost calculator to determine payable savings. These open-source methods, referred to as FLEXmeter, enable California to calculate energy efficiency impacts. This codebase and methodology can be replicated to achieve similar results for other governments in line with requirements of the IRA.

Open Source Beyond the IRA

US government agencies already have open-source mandates, including the General Services Administration, whose default position for developing and implementing new technology projects is to utilize open source and share code back with the community. A Department of Defense pilot program requires 20% of custom code be released as open source.

LF Energy’s focus on decarbonization of power systems through digitalization and open source represents an unprecedented change for electrification, electric mobility, and grids. Mitigating climate collapse while ensuring economic prosperity requires that we network supply and demand through secure distributed hardware, data, and software. Future grids will be built on infrastructure consisting of bare metal hardware, VMs, containers, and cloud orchestration systems that can manage and choreograph those resources, plus software-defined networking (SDN) controllers that enable high data processing.

Adopting an open-source strategy that maximizes flexibility, agility, and interoperability within the context of the IRA and other decarbonization efforts will help the energy sector innovate at the speed of technology.