Smart home energy management: The time is now. Or tomorrow. Or maybe next year

In the past three years, almost 60 million smart meters have been deployed.

05/06/2013


IMS Research (acquired by IHS, Inc.)The question of hype versus reality in the ‘smart home’ is a common one; and I’d argue that the answer differs significantly depending not only on how the term ‘smart home’ is defined, but also the type of company asking the question and the geographic region in question. Looking at just a single segment,  if we take the ‘smart home’ to mean ‘using smart metering or home automation for energy management’ (only one facet of the true ‘smart home’), then for device suppliers – and therefore connectivity IC & module providers – the reality is certainly starting to match the hype.

In the past three years, almost 60 million smart meters have been deployed. Almost 20 million of these have included a ‘HAN gateway’ (typically ZigBee) to enable connectivity between the backhaul AMI (typically powerline or RF mesh) and in-home devices, such as in-home displays (IHDs). A key argument for the inclusion of a HAN gateway in smart meters – aside from enabling connection to an IHD – is to enable more sophisticated pricing tariffs, such as dynamic pricing, to smooth demand peaks (and avoid firing up the most costly power plants). This offers the potential for ‘smart’ devices, such as thermostats, appliances, and electric vehicle chargers, which can be automated to run at times when electricity is cheapest. Between 2012 and 2016, 300 million additional smart meters are projected to be shipped; with a third of these including an integrated RF ‘HAN gateway’. Further, ‘smart’ devices (IHDs, appliances, thermostats, etc.) will offer further opportunities for device OEMs and connectivity solution suppliers alike.

Yet from a consumer perspective, the situation is very different. Many smart meters which have been installed to date do not feature a HAN gateway to enable connectivity to in-home devices. Even where this additional hardware is present, many utility companies have not enabled it. In many cases, even the inclusion of an activated HAN gateway can offer little value to consumers, aside from enabling connection to an in-home display (where the short ‘mean time to kitchen drawer’ argument suggests consumer appreciation of these devices is short-lived). Currently, dynamic pricing tariffs or demand-response programs are few and far between; where they are in place, consumer experiences have been variable.

However, the landscape here is encouraging. Utility companies’ plans for activating HAN gateways are multiplying, as is the development of more sophisticated pricing tariffs to take advantage of smart meter deployments. Yet widespread availability across many countries is still some years away. In the meantime, companies are deploying ‘smart-ready’ devices. Examples include ‘smart-ready’ electric water heaters and other appliances which require an after-market communications module which consumers themselves can connect (reducing the cost of the basic device and increasing flexibility). Further, some companies are launching energy information display systems (either IHDs or gateway-based services) which can connect to the AMI network where the infrastructure is installed, enabled, and able to pair; or meter clamps to enable whole-home energy consumption information to be measured where access to the AMI network is not available; and smart plugs to measure independent device-level consumption data. Often, such systems are being deployed as part of managed services, by a wide range of companies including ISPs, cable operators, and security providers.

So does the reality match the hype for smart home energy management? Well for smart meter OEMs and associated component suppliers, the time is indeed now. For other suppliers of home energy management devices, the time is certainly coming, with over 6 million smart home energy management devices – aside from smart meters – expected to be shipped this year, up from an estimated 3.3 million in 2011. In 2016, annual shipments are expected to be over 30 million units in the energy management segment alone, as a range of retail channels develop, managed services become more widely offered, and certain government legislation helps the market along.

And for the consumer…? From an energy demand management perspective, the reality is yet to be seen. There’s certainly been a lot of backlash about smart meter deployments, ranging from picket lines to prevent access by the utility trucks, to a recent incident where a Texan lady is said to have pulled a handgun on a utility worker to prevent smart meter installation. While such situations seem to be rare, other questions about smart meter installation have arisen. Will demand-response programs offer actual monetary benefits to the consumer? How easy will it be to pair ‘smart’ devices with smart meters? Will physical IHDs actually be used, or will they be quickly left to reside in the depth of a dark drawer somewhere? Will they be replaced by ‘soft’ versions, such as displays on smart phones and tablets?

However, more commercial energy management solutions – such as those from existing service providers or available via retail channels – are now becoming a reality. In the short to medium term, it is these which are set to have the biggest impact on consumers’ energy management habits; as well as on the wider ‘smart home’ market as a whole. This segment is particularly interesting in its connectivity requirements, as it is not constrained by the heavy requirements of legislation that have beset some of the utility companies. As a result, companies are opting for a range of connectivity technologies for such systems, including ZigBee, but also Z-Wave, EnOcean, KNX, DECT ULE and others.



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