For Demand Response to be implemented in residential households, a residential aggregator will be necessary. Up to now, the lack of infrastructure and clear business models has inhibited the formation of a commercial aggregator on this level.
While SEMIAH is able to provide the technology required for aggregation of residential households' flexibilities, in his paper RAMP: Impact of Rule Based Aggregator Business Model for Residential Microgrid of Prosumers Including Distributed Energy Resources Mohamad Abdullah Al Faruque's of the University of California, Department of Electrical Engineering and Computer Science provides a comprehensive business case for residential aggregators.
Seven rules must be adhered to for the RAMP business model to be profitable:
Rule 1: the price of the renewable electricity prosumers receive from the residential aggregator will be higher than the price received from the Utility.
Rule 2: the electricity price prosumers receive from the residential aggregator i will not be more than the price they had been paying to the Utility and other houses who are not participating in the aggregator model is paying to the Utility during that time-frame.
Rule 3: the electricity price residential aggregators receive from the Utility must be at least similar to what an individual prosumer will receive.
Rule 4: the price of electricity that the residential aggregators may sell to the Utility during the peak load time will be higher than the normal flat price that Utility pays to the residential aggregator.
Rule 5: mostly both (residential aggregator and prosumer) will receive the same price with/without aggregator presence from the Utility for their produced additional electricity. Regulation will monitor that Utility does not obstruct the aggregator business.
Rule 6: the energy storage including EV batteries must be sufficient to accommodate intermittency of the renewables.
Rule 7: it may be also possible to trade electricity among neighboring residential aggregators.