Home energy management grows in some mind-bending ways

"Home energy management" is a field that has long been as unsexy as it sounds. But a wave of new technology is about to make it hot and even unsettling in its ability to know how much energy we're using.

The home-energy field is piggybacking on a much bigger consumer market: the smart home. Technologists have said for years that an ecosystem of dryers, coffee makers and other appliances that communicate with each other is just around the corner, but now it actually might be happening. Wireless standards and cloud computing have gotten sophisticated enough to build such systems on the cheap.

Juniper Research estimates that the smart home market will climb from $33 billion in 2013 to $71 billion by 2018. And IHS projects that 45 million households worldwide will have some form of smart-home services by the end of 2018, up from only 6.5 million at the end of last year.

Home energy management, meanwhile, is experiencing a "frenzy" of activity, said Alex Herceg, an analyst at Lux Research who watches the market. He counts 30 to 35 companies in the industry, many of which didn't exist three years ago.

Thermostats and sensors are coming online that capture temperature and energy signals from the house with extraordinary detail, creating opportunities for energy savings that are almost spooky (EnergyWire, April 14, 2014).

One is a thermostat, part of a smart-home offering by Comcast Corp., that streams its data to a Silicon Valley startup called EcoFactor. That company analyzes the particular way that home heats and cools. Then it signals the thermostat to cycle on and off at exacting intervals, lowering energy use while keeping the house comfortable, said Bill Horrocks, a Comcast vice president. All of this occurs even if the homeowner doesn't adjust the thermostat or have a particular desire to control energy use.

EcoFactor claims its algorithm is so finely tuned that it can detect when a homeowner's air filters have become clogged, said John Steinberg, an EcoFactor co-founder. It makes possible a scenario where Comcast, the cable company, notifies a homeowner that the air filters need changing and recommends service companies to replace it.

Another new device is an optical sensor that attaches to the electrical meter and "listens" to the waveform of the electrical current in order to figure out how much energy individual appliances are using.


Each appliance has its own signature, according to Abhay Gupta, the founder of Bidgely, a company that works with utilities to make sense of, or "disaggregate," this data.

Bidgely has learned that a dryer, for instance, demands brief, regular bursts of electricity as it heats clothes. The signature is unique for the biggest energy slurpers in a home, from air-conditioning units to pool pumps to aquariums.

"In the old paradigm, there's always been access to data, but it was up to the homeowner to figure out what the data meant," said Peter Porteous, the CEO of Blue Line Innovations, a firm that makes the meter sensors and has deployed 160,000 of them to utilities in the last 18 months.

Now, he said, "the heavy lifting is now done on behalf of the homeowner."

Selling a 'smart home'

These connected energy devices are opening up a trove of intimate information that might make homeowners uncomfortable, even as they find the temperature in the bedroom more to their liking.

All companies interviewed for this story said that customer data are kept secret, while acknowledging that such data could be quite valuable. Nest Labs, which is perhaps the best-known company in home energy management because of its sexy-looking thermostat, was bought by Google Inc. for $3.2 billion a few months ago. Nest officials declined to be interviewed for this story.

The Nest thermostat is managed by its user either via the Web or through its wall-mounted dial. But like EcoFactor, it is designed to learn its user's habits and maximize both comfort and energy savings without much input.

Across the Atlantic, in Germany, another startup called Tado has a similar approach to Nest, as well as its stripped-down design aesthetic. It replaces the wall thermostat with a slim white box that coordinates with a temperature sensor and the home's wireless Internet hub. It uses the time of day, the local weather and the location features on the occupant's mobile phone to tailor the thermostat to its user.

Tado is making overtures into the U.S. market, just as Nest is beginning to sell in Europe.

The prospect of owning the platform for the smart home is cause for salivation among the companies competing to dominate it. It creates not just the opportunity to sell lots of connected things -- alarms, locks, thermostats, cameras, computer-controlled light bulbs, coffee makers and dozens more products -- but to charge a monthly fee to maintain the service and to perhaps keep the customer's allegiance for the long term.

The sales pitch for the smart home, insiders said, is a simple mantra: security, convenience and energy savings. But there's a caveat, said Kevin Meagher, the general manager of smart-home products for Lowe's, which has its own smart-home platform.

"I'm sad to say that the first two -- safety and convenience -- are the things that make people pull out their credit cards right now," he said.

Smarter, from the boiler to the meter

Other companies, such as Nest and Comcast, are finding that a smart thermostat generates plenty of sales. Two-thirds of the customers for Comcast's new service, for example, are "not security intenders," Horrocks said.

For the companies that aim to manage energy, the thermostat is just the beginning. Of the $1,200 that the average U.S. home spends each year on energy, Herceg said, two-thirds is dedicated to heating either air or water. To further reduce energy bills and attract more customers, companies must coordinate several parts of a home's electric and gas system.

There Corp., a smart-home company in Finland, claims that it can in some cases lower the combined energy bill by an astonishing 40 percent.

The backbone is smart meters, which communicate detailed energy information from the home to the utility. They are being installed all over the industrialized world and are nearly ubiquitous in Scandinavia. Only a few U.S. power companies have reached full saturation. Many European utilities use the smart meter to offer "dynamic pricing," which makes energy cheaper when it's most available. In the U.S., such programs are in their infancy.

There's software controls not just the thermostat but the boiler, which uses lots of energy for space heating. By firing up the heat (or the air conditioning) only when the power is cheap -- and in tandem with data on local weather conditions and on how much electricity the rooftop solar panels are producing -- the power savings can be tremendous.

No U.S. company or utility is yet offering such a sophisticated system. Still, things are moving in that direction. Smart meters are being installed at a brisk clip, and dynamic-response systems are coming into focus. Comcast is mulling adding an intelligent pool pump to its home ecosystem, while Lowe's says that in June it will unveil a connected water heater.

"We're starting to give you the opportunity to control the things that are really guzzling the gas," Meagher said.

Twitter: @DavidFerris | Email:

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