Access to real-time energy consumption data is valuable to consumers. Consumers that believe an energy-efficient home is important also find real-time energy usage data the most appealing of the energy monitoring services tested. Many value-added services that can be built on top of energy data are highly appealing.

Understanding which products consume the most power and which continue to consume power consumption even when off represents knowledge desired by many consumers. Understanding and reporting when an appliance begins to operate less efficiently is also a big opportunity, as consumers are less than satisfied with current solutions to this problem.

Home energy management has the opportunity to grow through consumers’ reduced price sensitivity for energy management devices, and the integration of energy devices, smart home solutions, and utility services.

Key Trends, Market Developments, and Innovations:

• Distributed energy resources (DER) attract new players
• Leveraging smart meter data enables new insights
• Zero net energy (ZNE) homes gain traction
• Smart thermostats leverage all available channels
•  Integration is key to success
• There is so much value in data and services

Distributed energy resources (DER) attract new players

An increasingly diverse set of energy management solutions are entering the market from multiple channels.

• Smart home service providers continue to leverage a diverse collection of sensors to determine occupancy and automate and optimize thermostats and lighting.
• Smart product manufacturers are similarly adding intelligent control and sensor to optimize energy consumption.
• Solar companies are integrating thermostats, electric water heaters, and battery storage to new installations to optimize consumption with generation.
• Data analytics firms are developing sensors and platforms that leverage energy consumption data.
• Energy providers are offering electronic energy audits, personalized recommendations, and incentives to improve energy efficiency.

Each of these players offers energy management solutions to create value for consumers; however, collaboration on a broader energy management solution is still an opportunity, as no channel has successfully deployed a comprehensive solution to the mass market. Each player is working to establish its own market position. Collaboration will come once success is achieved within each channel.

Leveraging smart meter data enables new insights

Disaggregation of residential meter data from a single whole-home data point into a listing of devices in the home and their associated consumption provides new insights into what is happening in a home. Many customers have little understanding of how much energy an appliance uses or the associated cost of that energy. Disaggregation allows customers to understand how each appliance contributes to the overall bill, enabling better understanding of how to reduce consumption. Consumers can use this data to estimate the annual savings if they are considering replacing an appliance.

Utilities are using disaggregation to enhance the effectiveness of DR programs by pushing notifications with specific behavioral changes that will provide the greatest amount of energy reduction for the specific house. Utilities can also use this information to target efficiency programs to consumers with older, much less efficient refrigerators, thus maximizing their return on investment. Software is accelerating the pace of change and driving dramatic improvements in the solutions provided by all of the different energy management products and services. Access to data, integration with different data sources, and analytics on the combined data set are enabling new solutions that offer significantly more value. Datasets are becoming available for a wide variety of applications.

Zero net energy (ZNE) homes gain traction

In January 2020, California implemented building standards for new construction homes that combine renewable energy solutions with high building performance to achieve zero energy consumption. Essentially, the homes use as much energy as they produce. In the most common scenario, photo voltaic (PV) panels capture energy from the sun and convert it to electric energy. The solar energy produced off-sets the energy the home typically uses.  
 

Beyond California, other states are introducing Zero Net Energy (ZNE) legislation. While most activity appears near both coasts, communities across the country show interest in these high-performing buildings. Many communities view ZNE as an important building block for their climate and sustainability action plans

A ZNE house has multiple benefits that resonate with the buyers: quieter, more comfortable, healthier, and energy efficient. Production builders are entering the space, driving down costs and disrupting the housing industry as new construction techniques are adopted.

Smart thermostats leverage all available channels

Smart thermostats are consistently a popular smart home device, with 13% of U.S. broadband households owning at least one smart thermostat. Smart thermostat advances in data-based features, compelling product design/user experience, ease of self-installation, and energy cost savings drive product adoption. The ROI promise, that “energy savings can pay for the device” in a short time frame, is persuasive.

While a handful of brands have garnered the majority of market share, more models at diverse price points are entering the market, which will make them more affordable for mass market consumers. With a growing installed base, smart thermostats are gaining visibility in primary homes and vacation rentals where more friends and guests experience their benefits and receive product recommendations.

Among other smart product types, smart thermostats set the bar for leveraging all available channels to reach the end consumer. Adoption of these devices is supported by expanding retail merchandising, integrations with security and smart home services, partnerships between utilities and home builders/manufacturers and utility rebates, and DR rate plans. The combination of lower price points, rising familiarity, and a multichannel strategy will help push smart thermostats beyond early adopters and into the mass market.

Integration is key to success

Smart thermostat manufacturers continue to integrate voice activation, sensors, lighting, and other smart products to drive customer value and adoption. Voice control can be achieved through multiple methods: voice assistant on a smartphone, voice control built into the product, and smart speaker integration. Device OEMs are racing to enable integrations with platforms such as Amazon’s Alexa and Google Assistant.

The top five platforms used by consumers to control smart home products include Amazon Alexa, Google Assistant, Apple HomeKit, Samsung SmartThings, and Works with Nest. The relatively high level of importance attached to these platforms is largely attributable to the high awareness of these platforms. Consumers rate the ability to work with Amazon and Google platforms as important or very important.

Today, remote smart thermostat usage is higher among those using a dedicated, single-device app to control the thermostat. In addition, smart thermostats are the most popular smart home device to integrate with a security system. This creates partnership opportunities in areas between ecosystem players, such as home security providers, utilities, and others.

There is so much value in data and services

Software is accelerating the pace of change and driving dramatic improvements in the solutions provided by all of the different energy management products and services. Access to data, integration with different data sources, and analytics on the combined data set are enabling new solutions that offer significantly more value. Datasets are becoming available for a wide variety of applications.

Third-party datasets are being combined with sensor data from products and systems to create compelling applications. Low cost, high resolutions sensors are being integrated into products to create powerful datasets.

Value is created as a result of the analytics, modeling, notifications, and automation built on the combined dataset. Disaggregation provides insights on device-level operation, effectively adding intelligence to every non-connected product that is consuming power in the home. Energy modeling enables advanced automation solutions that deliver clear value to consumers.

Analytics and automation are the keys to crossing the chasm for energy management solutions. No user interface is the ideal user interface for consumers that do not understand or fear new technology. Laggards require that the technology be deeply embedded in the product, out of view from the user.

This is an excerpt from Parks Associates research library. If you need data or research on the utility and energy markets, please contact any of our team today. Thanks for reading our research! We appreciate the support.  

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