The Smart Home in 2010 – From PowerPoints to Pilots

Editor’s note: I cut my teeth covering the high tech industry from my base near Redmond Washington, where it was routine to get briefings from Bill Gates and Steve Ballmer of Microsoft, and from the many other CEOs who trekked to Redmond to "kiss the ring." I came away with a great appreciation for ultra-smart tech heads.So I was delighted when we got a chance to run this guest editorial from Grid Net's Ray Bell. He's one of the Smart Grid industry's bona fide big brains. The fact that I agree with him on this topic makes it that much more fun to present his opinions to you. – Jesse Berst

By Ray Bell

You know that Home Area Networking (HAN) is making big strides when one of the world’s largest technology companies decides to debut their Smart Home product at CES (the Consumer Electronics Show, held annually in Las Vegas), which is what happened last month.  Intel CEO Paul Ottellini unveiled the company’s Intelligent In-Home Device.  It’s described as the “fourth screen” for the home (presumably, the first three are the TV, the computer, and the mobile phone/PDA), and it’s impressive

But in the world of utilities, innovation occurs at a strikingly different pace.  So what happens in a “cross-over” market, such as Home Area Networking (HAN), where the utility industry’s thoughtful, incremental approach to innovation collides with the “gotta have it here and now” mindset of consumer electronics technologies?     

I believe that 2010 actually bodes well for Home Area Networking (with some caveats).  This year, we’ll see more pilot projects (and fewer PowerPoint presentations), and here’s why:

1.     Standards are just about there.  After many years (and some spectacular failures) the industry is finally coalescing around standards for energy appliances and in-home network connectivity.  Even though the durable consumer appliance life-cycle is long (up to 10 years for items such as refrigerators, washers, dryers, and air conditioners), we are now seeing these standards starting to be implemented in products.  Check out GE’s appliance line, as an example.

2.     The utility-customer relationship is changing, most rapidly in de-regulated markets.  To reverse (or even just mitigate) global climate change, utilities must develop partnerships with customers, and provide compelling reasons (economic and otherwise) for them to change their consumption patterns.  Some de-regulated utilities have already experienced this shift: they’re exploring all sorts of new ways to communicate to consumers – with value-added offers, information, and new services.  Take a look at the messages on the Austin Energy website, in de-regulated Texas and you’ll see what I mean.
   

3.     Think “Smart Home” (not “Home Area Network”).  The name “Smart Home” conveys intrinsic value to consumers, while “HAN” just describes (poorly) a type of technology.  Names aside, now that some of the large, well-respected vendors in consumer technology (Intel and Cisco are just two examples) are entering this market, they’re also delivering years of consumer marketing research and expertise into the mix (and to everyone’s benefit).  

One emerging consensus: Energy insights alone aren’t enough to compel consumers to change their behavior (let alone notice their energy use!).  Instead, the goal is “daily consideration.” For consumers to embrace the Smart Home center, it needs “gotta see / gotta have” killer apps, including: home appliance control, home security system, video communications, home energy consumption and pricing, home multi-media system controls, and more.  With these goodies, consumers will have a plethora of incentives to check in frequently with their Smart Home center – to see what’s up, to transact (yup, that’s right: e-commerce right on the ‘fourth screen’), and to make intelligent energy resource decisions.

4.     “Point of Sale” information (in context) is paramount – and possible.  Even in a de-regulated market, unless and until consumers are made aware of their energy consumption – as it happens – it will be hard to change their behavior.  The Google PowerMeter concept is a great start, but it would be even more cool if it were local in the home, with real-time information in context (e.g., comparisons to what happened last week, last month, last year, and to the neighborhood, street, town or region). 

The Smart Home center must display real-time information, be rich in multi-media (and not delivered in narrowband), and graphically and visually intuitive.  Linking real-time consumption patterns to actual energy costs will provide compelling, behavior-changing motivations to consumers.
    

5.     Actual pilots have begun.  At Grid Net, we have been working for the past few months with a thought-leader utility and major systems integrator (names withheld until we make a formal, joint announcement) on an unprecedented Smart Home pilot program.  This project tracks consumer behavior vis-à-vis demand response and automated load programs, in order to see what really works.  This program evaluates (qualitatively and quantitatively) customer preferences, responses and decisions over a large socio-economic sample of consumers.    

The good news: this pilot isn’t the only one (although we happen to think it’s unique and will set a soon-to-be-repeated best practice for Smart Home pilots throughout the utility industry).  There are other projects emerging throughout the U.S. and the world.  Stay tuned for more insights, as we all learn more together. 

Of course, there are many unresolved issues for the Smart Home.  Who will provide (and support) this technology to consumers?  How can consumers easily evaluate and select different energy rate programs that meet their individual needs?  How will the impact of renewables (solar, wind, re-chargeable electric vehicles, etc.) change the utility – customer relationship? 

Despite these open issues, here at Grid Net we’re excited by real, substantive progress in this emerging market.  And we’re confident the Smart Home will only get smarter over time.

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Ray Bell is CEO and Founder of Grid Net.

You might also be interested in …

• Apple Eyes Crowded Home Energy Management Space
• Intel Unveils Home Energy Management Proof of Concept
• Grid Net Has a Plan B and Plan C... But Will That Be Enough?

Related SGN resources …

• Home Area Networks channel
• Smart Grid vendors

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