What Has the Greatest Value in the Connected Home?

May 21, 2012
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What offers greater value in the connected home? The smart grid, smart appliances, electric vehicles or standalone home energy management systems (HEMS)? Photo from Toshiba’s vision of smart homes and smart communities. Click to go to the video.

I recently received a comment on the post Smart, Connected Home = Green? asking “in which sector do you estimate there are the greatest points of value from the connected home for the end users: smart grids, consumer appliances, [or] security?” And the comment appears to have energy efficiency foremost in mind.

Great question. And if I had a definite answer, I could make a lot of money.

But the question got me thinking. Really thinking. And reviewing a whole bunch of stuff that I’ve written for this web site and others. And do you know what? I still don’t have a clear answer.

So let’s very briefly review the contestants:

Smart Grid(s)

I’ve stated before that the smart grid, at least in the United States, should be the biggest driver for home energy management, as varied Time of Use rates and other dynamic pricing options should give people incentives to “load shift” big electrical loads like dishwasher and clothes washer cycles to less expensive times. However, the glacial pace of smart grid rollouts by the utilities, many of which are still mired in trial and pilot programs, puts a damper on such optimism. I think it will happen, but likelier in the second half of the decade, and who knows what will big changes will occur by then.

Consumer Appliances

LG's Total Home appliance solution. Click for larger image.

They’re the big energy users in a home, and connecting and controlling them—with or without a smart grid—can bring a lot of value to consumers. We’re already seeing this with systems by the service providers ADT, Comcast, Verizon, Vivint and others that allow users to control their thermostats (and therefore their heating and AC) from their smartphones. Mobile connectivity adds convenience and even makes it somewhat fun. Appliance manufacturers are readying “smart” appliances that can connect to smart grid services—and they’re looking at all sorts of applications like keeping an inventory of your foods in the fridge and expiration dates to make shopping easier. But here’s a rub: People don’t buy new appliances all that often. So this, too, will take a while to take hold.

Security

Here’s where the service providers like ADT, Comcast et al have it right. They know people want home security and like the idea of mobile connectivity, so that’s what they sell their systems as—while including some basic home automation and energy management (lights and thermostats), though one Verizon package also offers energy monitoring. Security may have the biggest value in the connected home to consumers—at least in perception. And it is being used to sell that connectivity, automation and energy management.

But what I think could be the biggest drivers—and ultimately the biggest value to people in connected homes are …

EVs: Concept or reality? Here's Panasonic's vision from the Consumer Electronics Show.

Electric Vehicles

EVs can be the connected home/energy efficiency lynchpin, for several reasons:

  1. A great majority of us still require vehicles, and more and more EVs are coming. In the United States especially, we live in a car culture.
  2. As soon as you plug one in to charge, likely at a faster 220/240 volts, that charger will instantly become the biggest energy draw in your home.
  3. The electric utilities are terrified that we will all come home and plug in our electric vehicles at the same time, like from 4 pm to 7 pm, overtaxing the electrical grid and local transformers.
  4. The utilities are likely to implement expensive Time of Use rates during these times to discourage charging until later at night, or “smart changing” cars a little at a time.
  5. Your home will need some intelligence—whether in the charger, the cloud, or an in-home processor—that can govern a smart charge of an EV, while knowing the utility rates and possibly turning off or turning down other big loads like air conditioning systems and pool pumps. All of this, possibly while you run the oven to cook dinner.
  6. Vehicle-to-grid (V2G) technologies could tap the power in your car batteries to send to the grid, or with a home processor to other parts of your home for power. Also consider the possibilities of combining this with a solar PV system or other energy source.

EVs could be the biggest driver of energy efficiency in the home, because they will force utilities to implement Time of Use rates and other smart grid services. But will they bring true value to a connected home? Our electric bills will rise, while our gas costs go way down (experts say it’s still cheaper to charge an EV than pay for gas). But the real value EVs bring to the connected home could be in the connectivity they force us to provide.

With EVs, the connected home won’t be a luxury or a convenience or a cool factor. It may be a necessity.

The caveat: Don’t expect serious EV market penetration until later in the decade, analysts predict. The cars are pricier, the commercial charging infrastructure is nascent at best, and the battery technology still needs improvement. And again, who knows what will happen in other automotive innovations and with gasoline prices by then.

Also, while I love hybrid vehicles and yearn for electric cars, but I’m still not convinced that the deeply ingrained culture of the internal combustion engine, at least in the U.S., can change—even if electric-powered vehicles have instantaneous pickup and acceleration. Without exorbitant gas prices or attitude-altering (near cataclysmic) events, such a sea change in this culture will certainly take time.

It’s both exciting and scary that the worlds of the connected home, energy management, the smart grid and smart appliances—and by association a large chunk of energy efficiency in our society—may well hinge on the electric vehicle. Go GM?

Until Then …

ThinkEco's modlet learns your energy usage patterns and offers scheduling recommendations.

The biggest value in a connected home for consumers may well be the many standalone (not grid-tied) home energy management systems coming out, in everything from Z-Wave devices to the service provider systems (also Z-Wave), to powerline and wireless plug-in modules that read the energy usage of devices and appliances and allow you to control them from a computer or mobile interface. Many are already affordable and may evolve into valuable ecosystems for homeowners. Until a broad movement toward EVs or the smart grid takes hold, these systems may well be the secret weapons in the push toward energy efficiency. Until then—and likely well afterwards—the home energy management market will be cluttered, confusing and confounding.

You may also like:

Here Comes Smart Grid 2.0?

Electric Cars, Energy Efficiency New Priorities for DOE

Home Energy Management: Are We There Yet?

Top 10 Smart Grid Trends to Watch

Smart Meters or Smart HEMs?

At CES, Smart Energy Abounds

10 GreenTech Trends and How To Plan for Them

 

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