Utilities across the United States are starting to get the news: You want to reach your customers? Get an app for that.
The home energy management applications (apps) market is just emerging, but new tools and access to previously unavailable data has begun attracting residential customers, according to a just-released brief from Navigant Research.
Residential customers are beginning to discover that apps can help them “efficiently use and manage energy consumption in their homes,” explains the brief, titled Energy Apps for Residential Customers.
Utilities and private sector vendors mine data from smart meters, smart thermostats, and connected appliances to build apps that provide “insight into their power usage and offer ways to reduce consumption, helping customers save money.”
At the same time, the research brief points out that “utilities benefit from better informed and more engaged customers who help make grid operations more efficient.”
The purpose of the paper is to identify who is using energy apps, what kind of apps they are downloading, and why, explained Paige Leuschner, co-author of the brief and energy research associate for Navigant Research.
From their findings, the Navigant researchers drew some preliminary recommendations for utilities that want to engage their customers, and for vendors creating energy apps.
Inside the energy apps world
There are three categories in the energy apps world, Leuschner said.
The three categories are "consumer applications, prosumer applications and utility engagement applications," Leuschner said. Some 97% of downloads are consumer apps, with the remaining 3% split between utility engagement and prosumer apps.
The vastly more popular consumer apps are typically successful because of the “cool” factors that attract customers. An example is Homeselfe, which helps people see where their home energy consumption is coming from.
Prosumer apps are “portals for customers who can add power or services for the grid,” Leuschner said. The most common examples are those provided with rooftop solar installations, like the MySolarCity app that allows system owners to see their solar generation. “Not all prosumer apps have such advanced capabilities,” Leuschner added.
Utility engagement apps are usually from private sector app vendors and provide white label software that supports utilities in connecting with their customers. But increasingly, utilities are considering apps designed in-house. The apps' main functions are to allow consumers to more conveniently pay their pay their bills, see their energy use, or contact customer service.
There are four basic purposes for apps, Leuschner said. They may allow customers to learn about efficient energy use, remotely control their thermostats and heating-cooling systems, contact their utility and pay their utility bills. Users can also participate in energy efficiency or behavioral demand response programs by being notified of savings opportunities when their utilities are looking for reductions in energy usage during demand response events.
The apps can work in several ways. The simplest apps, like HomeSelfe, offer educational information and invite users to input data on their own energy use. And the apps that facilitate customer-utility communications are another example.
Others collect valuable but limited data through smart thermostats, with Nest’s smart thermostat being probably the most advanced in that category. Another example is the Honeywell line of apps.
One Honeywell app allows consumers to remotely adjust their thermostats. Another has “a feature called geo-fencing,” Leuschner said. “It recognizes when the smart phone is not in the home and shuts down the temperature control.”
More opportunities to create energy savings typically come from apps designed by vendors that work with utilities or public sources to obtain data. App users can access and use that information to change behaviors and create bill savings through more efficient energy usage.
Apps may also draw on publicly-sourced information like weather data to allow users to prepare their home environments for something like a sharp air temperature change.
The most advanced energy apps can disaggregate a home’s energy consuming devices by recognizing appliances’ differing energy use signatures.
The brief does not total or rank available energy apps, but there is data on downloads. Alarm.com, the parent company for EnergyHub, has the most downloads on Android. And the Nest app is among the leaders for iOS users, Leuschner said.
Utilities getting into apps
The use of apps by utilities “is a growing phenomenon, as they move to serve the twenty-first century customer that generally expects more than just electricity service,” Leuschner said.
Many utilities are already exploring web portal partnerships. Both Clean Power Research (CPR) and Clean Energy Collective (CEC) have versions of white label web portals that utilities are actively making use of. The CPR product helps utilities partner with customers interested in rooftop solar. The CEC product allows utilities to develop community solar projects.
More forward-thinking utilities are now partnering with vendors to offer more advanced mobile apps, Leuschner said. “Vendors say web portals are important, but going mobile is even more important. Some utilities are still slow to discover these apps, but a lot are trying new things.”
The research brief offers summaries of through case studies of three utilities. They show “generally positive customer experiences and possible energy savings of roughly 8%,” according to the brief.
A Direct Energy pilot offered an online app. It obtained “very positive results,” Leuschner said, perhaps because it included the very advanced function of appliance level disaggregation.
“It shows customers how much energy is being used by their ovens and their lights and how much energy they can save by turning down their thermostats,” she said. “Utilities can also send their customers alerts if extended energy use is driving up their bills.”
A DTE Energy pilot app offering obtained similarly positive results by providing an app that did the same kind of disaggregation. “It connected to the smart meter and used that data,” Leuschner said. Unlike other programs with less capable apps, “people keep using the DTE Energy app as opposed to just downloading it and never opening it.”
An Infinite Energy pilot didn’t use an app that did appliance disaggregation. Instead, the utility developed a rewards program, which gives customers points redeemable for gift cards if they kept up with their monthly energy usage and made improvements that lowered their bills. “They saw better than industry average retention rates and more energy use reduction,” Leuschner said.
In keeping pace with the energy apps market, most utilities are still in pilot programs, and few have “full deployment of popular apps,” she said. “The number of vendors offering services to utilities is increasing and some utilities are already thinking about doing their own in-house products.”
The Navigant researchers concluded on three preliminary “best practices” for utility apps. They should:
- Be consistent in what they offer so customers find the same services on each visit
- Be interoperable so they have the same look and services across platforms
- Provide added value so their outcomes consistently benefit the end use customer
The Honeywell app
Honeywell markets six thermostats to its 100 million global customers, said Connected Homes Division Senior Marketing Director for Software as a Service and Mobile Apps Sandhya Rao.
The thermostats range from more basic products to the flagship Lyric thermostat with multiple features like geofencing, notifications, shortcut preference learning, and remote control from mobile smart devices.
The Lyric device is also wi-fi capable, and allows utilities and developers to access its application program interface (API) through a Honeywell web portal if they want to connect it to other appliances, Rao said.
“But increasingly, Honeywell is focused on the Lyric mobile app,” she added.
The Honeywell app that communicates with the fullest range of connected thermostats is available for both Android and iOS devices. “It is the top-rated thermostat app in the iTunes and Google Play app stores,” Rao said. It also incorporates publicly available data like weather information.
There's a growing trend toward having more connection and control of your home when you are absent as access to broadband increases, she added. “It is what consumers are asking for.”
Honeywell recognizes that some its customers will want to choose. This is why it offers both proprietary products and an API that allows other developers to bring the Lyric thermostat into their ecosystem.
“Having a customer use their own app is OK,” Rao said. “The connected home is about playing in the ecosystem and making sure that no matter how a consumer wants to connect, Honeywell is there to help them.”
Through its Smart Grid Solutions division, Honeywell works closely with utilities on energy management and demand response programs, Rao said.
The Honeywell app has a dedicated API, which allows utilities to run demand response programs for consumers who have connected Honeywell thermostats and opt in, Rao said.
When the utility calls a demand response event during peak load periods, it can take control of the thermostat and make a slight adjustment of one degree to two degrees. That, in aggregate, can have a significant impact on load.
The utility works through the Honeywell API only when the utility, the vendor, and the customer have signed agreements, Rao said. “But that is when the app is important. It will show the customer a notification. If the consumer doesn’t want to participate, there is an opt-out option through the app.”
Changing consumer interaction
The Bidgely app is among the leaders in offering appliance disaggregation.
“The ability of apps to see what each appliance is doing is amazing and could change the way consumers interact with their appliances,” Leuschner said.
With over 55 million smart meters installed in U.S. homes, the potential of smart meter data is massive, explained CEO/Founder Abhay Gupta. Bidgely has pioneered the deep analysis of under-used smart meter data to produce reductions in consumer energy use and bills, while streamlining utility operations.
“The software is programmed to recognize the energy use pattern of each appliance,” Gupta explained. “We extract the patterns so we know what each appliance is doing.” With that knowledge, Bidgely can guide consumers to significant savings at little cost.
It has grown its customer pipeline ten times over in the last year, and added 12 utility customers, including ComEd, London Hydro and TXU. Ten utilities have done validations of the technology, according to Gupta. A recent Pacific Gas and Electric pilot involving 850 customers produced about 7.7% savings in energy costs.
“Our business model is to work through our utility partners,” Gupta said. "The utilities rebrand themselves and make the service available to their customers in return for allowing the smart meters to be deployed.”
The customer savings come at a significantly lower cost in dollars/kWh to the utility than energy efficiency upgrades like new construction, appliances, or lighting, he added. Most of the savings come from changes in customer habits or simply learning where things can be turned off.
At present, Bidgely is typically paid a subscription yearly fee for each home for its cloud-based, software as a service product. But it is developing a new “performance for pay” business model, according to Gupta. “We get paid per kWh saved. If we deliver less savings, we get paid less; if we deliver more savings, we get paid more. That takes the risk off the utility and puts the risk on us.”
The new business model could be as much as 30% of the company’s revenue by 2018, Gupta said. Utilities get more than a new relationship with their customers from these apps.
“They have efficiency mandates and there are penalties for not meeting them,” he explained. “They may pay a fine but they also don’t get approved to build new infrastructure and make the capital expenditures that provide the biggest part of their profit.”
To meet its mandate, a utility can choose an efficiency upgrade program or choose the more cost-efffective option of adding a new program to its website and making a mobile app available.
“This is the future of the utility world,” Gupta said. “Because of renewables and distributed generation, customers are going elsewhere. This helps the utility rebrand and re-engage with them.”
From interviews with app vendors, Leuschner expected more utility engagement.
“A lot of their programs are still pilots and a lot of what their customers are actually downloading to manage their energy are the cool factor apps,” she said. “That may be where the industry is going. Why can’t the utility apps also be the cool apps?”
Though the apps that disaggregate home devices most impressed her, Leuschner does not expect them to emerge widely within the next five years. “The thing that will be big is the change from web portals to mobile apps,” she said. "It is going to be important.”
The advice she would give utilities about apps is that, along with the cool factor, they must be easy for the consumer to use.
“The most important thing for engaging customers and increasing energy efficiency is to make it almost unconscious and certainly not a hassle or even an inconvenience to open their app and pay their bills.”