5 Biggest Drivers for Energy Management

March 24, 2011
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What will drive the energy management market?

I discussed this at length with several people last week at EHX: The CE Pro Event in Orlando, Fla.—and I addressed it in a panel I moderated on Making Money in Energy Management: An Overview and How-To, later to be replayed on a CE Pro Live virtual event.

Shown is a copy of a slide from my presentation, listing the market drivers I’ve identified. And there are two more biggies: wireless and connectivity. They should join security, service providers, and the smart grid at the top of any list. But my top pick for a driver may surprise you.

Here are my top five:

5. Wireless

More and more energy management solutions from companies such as Somfy, Honeywell, HAI and others and coming in wireless forms. See my post on ElectronicHouse.com detailing some of the systems at EHX.

“There’s a lot of convergence in this space. Wireless technology is getting to the point where it doesn’t take tens of thousands of dollars to do these things,” says Thomas Kunjappu, marketing manager of Honeywell Security, which is launching wireless Z-Wave-based touchpanel and thermostat systems that include connectivity to other Z-Wave devices like Somfy shades.

4. Connectivity

HAI's new Andriod app, to be available in April.

Connectivity is a very big part of energy management. If it’s not the biggest driver of energy management systems, it may be the single most appealing feature.

HAI (Home Automation Inc.), for one, was showing its iPad and Android apps at its booth at EHX, to show dealers that they can develop whatever interface they need for HAI’s products. “Smartphone applications are driving a lot of the sales,” says Robert Pickral, HAI’s Southeast sales manager.

This is backed by Parks Associates’ findings that one group of people most apt to want energy management services in their homes use smartphones. It makes sense: These are people who want to stay connected and embrace technology for the things it can do for them—like help them save energy. They are quicker to understand that with smartphone connectivity they can set the thermostats remotely to turn down the air conditioning when they’re not at home and control other things in their homes.

The other group Parks has identified as more responsive to energy management …

3. Security

ADT and Xfinity (aka Comcast) are rolling out security services to homes, in the name of connectivity. In other words, security and connectivity are going hand in hand. Parks Associates had also identified those with security systems as more apt to embrace energy management systems—and more likely to pay for energy monitoring. They are comfortable with monitoring services.

“A lot of dealers we’re seeing value getting into security and getting a monthly recurring revenue,” says Honeywell’s Kunjappu.

Now consider what ADT, Xfinity and others rolling out these “connectivity” solutions want to add to the mix: energy management.

Think about it: Security, connectivity, wireless. Think ADT has figured something out? For the time being, security and connectivity solutions being offered by the big service providers will be the biggest driver of energy management systems into homes.

2. Smart Grid

This could be the biggest driver of all. But it isn’t yet, because smart grid services just aren’t available in most areas. Many utilities are still in trial and pilot programs and have not made decisions on whether to offer just two-way communicating smart meters with likely wireless ZigBee connectivity or go into the home with some form of energy management systems.

“Utilities will be the ones to make the big push,” says Kunjappu. But he says that security, HVAC, builders, home automation, cable providers, and wireless will drive the market as well.

And according to forecasts from Park Associates, home energy management networks independent from smart grid rollouts will outnumber the smart grid-based home networks by 10 million to 6 million in 2015. Parks predicts the smart grid-based systems won’t surpass independent home networks until late in the decade. So don’t wait for the big push from the smart grid. It will happen, eventually.

“The biggest driver will be the utility pricing,” says Thomas Pickral, director of business development for HAI. That means Time of Use pricing in which electricity used during peak load periods like 3 to 8 pm will be priced much higher, inspiring the need for load-shifting, or operating energy-hungry appliances at different times. This will de done through smart appliances that receive pricing signals from the utility via two-way communicating smart meters and possibly house-wide energy management and control systems that can intelligently store homeowner preferences and trigger energy-saving events by turning on and off systems.

1. Electric Vehicles

With EVs come EV chargers, such as Schneider Electric's Level 2 240-volt model.

Yes, electric vehicles. I am convinced that electric vehicles (EVs) will be a huge driver for energy management systems, especially in the home. This is because with EVs come EV chargers. And with EV chargers come with need to smart charge our vehicles, because electric utilities don’t all want us coming home and charging our vehicles at the same time. Also remember that expensive Time of Use pricing will factor into this.

EVs and their chargers will be able to communicate charging options with a smart meter, but it makes a ton of sense to add an intelligent energy management and control system to store preferences and allow the ability to remotely control charging options (remember connectivity?).

Plus, people understand cars and love, love, love them. The conventional wisdom is that the EV market will take years to develop, but stand at the gas pump today and tell me that EV acceptance won’t be—forgive the pun—accelerated.

Because of the immense popularity of automobiles in our culture, EVs could be the biggest driver of home energy management systems. It’s a can’t miss.

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2 Responses to 5 Biggest Drivers for Energy Management

  1. [...] energy management?image via NissanIn a roundabout way, the electric vehicle may turn out to be the best thing that ever happens to home energy management. Here’s why: Electric utilities fear EVs. They’re afraid that we’re all going to get them, [...]

  2. [...] go a long way to changing that.We’ve identified big box retailers in the past as being one the key drivers for energy management in the home. Other big drivers include service providers like ADT, Comcast, [...]

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