The Internet of Things, alongside the rising adoption of mobile devices, is driving the rapid expansion of the market for energy services within the smart home. Connectivity opens this sector to a variety of new players, including service providers, app developers, and device manufacturers. For utilities, smart devices open up many new opportunities to reduce consumption and shift load throughout the product lifetime, making them ideally suited for DR and EE programs.
The entry of new players creates competitive pressure, but the energy market in particular is a prime environment for new partnership opportunities. Parks Associates research finds individual smart energy features typically appeal to only one-third of U.S. broadband households at best, but nearly 70% of U.S. broadband households are willing to pay a monthly fee for a bundle of smart energy services. Consumers in general see the value not in one particular offering but in a bundle of services. To ensure the widest possible adoption, companies need to offer the broadest, most appealing bundle of services, which will lead both new and traditional companies in this ecosystem to forge innovative partnerships.
Traditionally, partnerships involve a bilateral agreement between two companies that have similar long-term goals and complement the others’ core competencies. Looking forward, the processes and thinking around partnerships must change in order to scale with the Internet of Things. Products must connect with numerous data sources to create a compelling user experience. Therefore, partnerships must adapt to the new reality of the connected world. The mindset of utilities, manufacturers, and service providers must change and adapt to the scale of the Internet and open themselves to the potential of many loosely coupled partnerships.
Operation Feedback and Recommendations – A manufacturer can use the connection to its product to become an advisor, providing feedback to consumers on how to adjust operation in order to be more energy efficient. Feedback can include advice on behaviors, modes of product operation, or simply information on how users are operating the device. In addition, features could include tips on how to get more operational use out of the product. Users may also benefit from being able to query operational history, enabling user-generated comparisons including energy consumption comparisons.
Automate Equipment Operation – Many products include features and capabilities that are not fully understood by users. Some of these features can lower the cost of operation of the device and reduce overall energy consumption. Manufacturers can provide tools for consumers that eliminate complexity and simplify operation of devices through automation. For example, a clothes dryer consumes less power if the heat is set to a lower setting, but that setting is generally set once and not adjusted. Sensing and automation can select the best setting for a given load and time constraint.
Fault Detection Diagnostics - If a device can automatically monitor its own operation and determine when performance has been degraded, the device can provide feedback, which will promote higher efficiency levels over the product’s lifetime. If a refrigerator door is not fully closed, has a bad seal, or the coil is dirty, the refrigerator will detect more frequent cycling and notify the owner that maintenance is required.
Choreographing Loads - Today, all of the appliances in the home operate asynchronously. Cyclic loads can be coordinated so that, for example, the upstairs and downstairs AC units don’t turn on at the same time. Choreographing loads limits peak demand.
Demand Following Supply - As more renewable generation comes online, systems can be used to consume load during periods of low demand and high supply, such as a windy spring night. Systems would respond to pricing signals to cycle on automatically. For example, the water heater may heat to its high temperature set point and then store that energy for later use. Because of the variable nature of both wind and solar generation capacity, utilities can use smart devices in demand side management applications to consume power when it is available and reduce consumption when it is not.
Smart devices are entering the market in increasing numbers. In a recent Parks Associates study 16% of broadband households reported owning at least one smart devices. As adoption continues to grow, utilities can take advantage of the installed base of products and partner with multiple manufacturers and service providers to achieve EE and DR goals and provide grid stability at a much lower cost than traditional programs.
Parks Associates will examine these market trends and partnership opportunities in depth at the 2015 Smart Energy Summit: Engaging the Consumer, held in Austin on February 16-18. This event brings together utilities and smart home solution providers into a single conference that explores the numerous partnership opportunities.