Energy management networks forecasted to be in over 9 million US households by 2014

Parks Associates' report Residential Energy Management: Forecasts for the Deployment of AMI and the Adoption of Energy-saving Products and Services finds over 80% of U.S. consumers are interested in reducing expenditures on energy consumption and willing to pay for cost-saving solutions. Cost-saving products and services that generate consumer interest include programmable thermostats, energy monitors and systems enhanced with energy-management capabilities, smart appliances, and energy-efficient CE systems.

However, the amount consumers are willing to spend does not cover the costs of required systems, creating a need for innovative business models that will enable a new energy management service industry.

Utility-based home area networks (HANs) are only one of several options for these solutions and services to enter the consumer market. By 2013, iREMs will outnumber utility-based HANs. By 2014, the vast majority of the nine million U.S. households with an energy management system will have an iREM. Engaging consumers is critical to success in this market. Business strategies must be developed that comprehend the magnitude of consumer education and support required for offerings in this arena.

Electronic Systems Contractors diversify their services with green and retrofit opportunities

Majority expect sales drop to continue through 2009, expanding business in retrofit and energy management to compensate

The majority of U.S. home systems integrators, who have had average revenues fall almost 17% since 2007, are making adjustments to compensate for declines in new-home construction and consumer spending by diving into the green and retrofit markets according to Parks Associates’ Channel and Consumer Monitor and CEDIA.

Parks Associates conducts quarterly surveys of the home systems channel, including online surveys of integrators installing home controls, entertainment systems, and energy management solutions. The most recent report, based on a second-quarter 2009 survey, was conducted as a joint effort from Parks Associates and the Custom Electronic Design & Installation Association (CEDIA).

Channel and Consumer Monitor reports that integrators, who have traditionally installed expensive control and entertainment systems in new homes, now get the majority of their revenues from retrofit jobs, which represents a major shift in this business sector.

The survey also found awareness of Smart Grid terms and technologies, such as smart meter and AMI, was low among installers, although almost one-third of integrators have installed some type of energy-monitoring system in the last year.

Results of the recent survey are only available to participants.

For the full press release, click here.

4 Steps to Residential Energy Management

From most news sources this week we hear progress, or lack thereof, of our government’s work on a comprehensive health plan. The most credible voices of opposition hammer on the notion that loss of choice and control will reduce the ability for consumers to reduce the costs of their care. Apply that same thinking to energy consumption. Today I have the choice, on a balmy Texas-in-July afternoon, to reduce my energy consumption by changing the thermostat. But aside from choosing to be uncomfortable, do I know how to improve my energy efficiency? As green technology proponents frequently remind us, if we don’t know what our home systems cost to run, we certainly are not equipped to fine tune them to more efficiently fit our lifestyles.

The four elements required to put the consumer in charge of his or her energy costs are:
1. Sufficient motivation for the consumer to make changes in current consumption behavior (this is implied).
2. An understanding of the energy used by each home system, measured in kilowatt hours and dollars.
3. The ability to program and control at least the major home systems, using common and easy to understand intelligent user interfaces.
4. A feedback loop which confirms which systems are responding to which programs and to what extent they are impacting consumption of kilowatts and dollars.

It is interesting to watch the development of these four elements. Parks Associates will, in the next thirty days, complete a survey of consumers which will quantify how strongly consumers desire the ability to impact their energy costs. Are they willing to purchase devices and technologies that will enable elements of control and monitoring? Are they (we) willing to replace costly home systems with ones that can be controlled and programmed? Are we willing to pay service companies, perhaps including our electric utility, our broadband and phone providers, or local tradesmen to install devices with a potential payback of a year or more? These answers are critical to the growth potential of a number of emerging industries.

The market is awash with the promise of new devices from companies as diverse as Black & Decker, Google, GE and Control4 – all with the technology to monitor or control some number of home systems. Network infrastructures inside the home are rapidly maturing. Unlikely partners ZigBee and HomePlug have joined forces to develop the Smart Energy market requirements – a roadmap of sorts to suggest how wireless and wired technologies may be used to develop an in-home control network. The table is being set and the silverware polished for arrival of the Big Guests – that is, energy utilities with their Advanced Metering Infrastructure (AMI) or Smart Grids. Analysts Bill Ablondi and Farhan Abid report that nearly 9 million AMI meters are currently installed on U.S. homes, and that Obama’s Stimulus Bill fuels the rapid deployment of Smart Grids with $11 billion in federal funding.

The Big Guests are coming to the table and will be showcasing solutions, as currently in Colorado Springs and Austin, Texas, which provide consumers with frequent feedback on energy consumption. Here is how the party will unfold; as the Smart Grid is in place, we will see first a growing number of technologies that provide in home monitoring of our home’s usage. This will be followed by introduction of smart appliances – refrigerators and water heaters which, like existing programmable thermostats for HVAC systems, can be programmed. This development will create demand for simple unified interfaces – applications that bring the control of several appliances together under an orchestrated master plan. Finally, we will see our Internet, mobile phone and even TV service providers cautiously join the party – seeking to provide control applications as extensions of the mobile phone service, or as a widget on TV, with the assumption that simpler controls will garner a few extra dollars on the monthly bill.

Unlike the current health care policy quagmire, our stimulus dollars at work combined with private enterprise will empower consumers with a growing variety of technologies to tailor energy costs to meet particular lifestyle needs.

Over Eight Million Smart Meters Deployed in U.S., with Millions More to Come

Report profiles key players in Residential Energy Management, analyzes new opportunities for companies in the Smart Grid value chain--

With over eight million smart meters already deployed in the U.S., the market for residential energy management (REM) has taken the first significant steps in deploying Smart Grid technologies and advanced meter infrastructure (AMI) on a broad scale.

The recently completed report, Residential Energy Management: Company, Alliance & Technology Profiles, says these deployments will open up significant opportunities for companies in the REM value chain. Public, private, and consumer factors are all driving this growth, and the Federal stimulus bill, with the support of the Obama Administration, allocates $11 billion for smart grid initiatives through 2010.

Residential Energy Management: Company, Alliance & Technology Profiles provides coverage of more than 60 companies and ten alliances, including Home Area Network (HAN) solutions and component suppliers; metering solutions manufacturers; Smart Grid enablers; and technology enablers.

This report is the first deliverable in Parks Associates’ comprehensive industry and consumer research service called Residential Energy Management: Opportunities for Digital Systems and Services.

For the full press release, visit click here.

Smart Roads. Smart Bridges. Smart Grids.

FEBRUARY 17, 2009
Smart Roads. Smart Bridges. Smart Grids.
If we are going to spend billions of dollars to fix our ailing infrastructure, let's make sure we do it right. Here are the technologies to make that happen.

By MICHAEL TOTTY

It's time the U.S. got a lot smarter.

http://online.wsj.com/article/SB123447510631779255.html
Printed in The Wall Street Journal, page R1

Get Smart… I couldn’t help but think of the Mel Brooks and Buck Henry show starring Don Adams & Barbara Feldon back in the late 60’s. Hopefully the U.S. will get a lot smarter than the technology-enabled characters in this sitcom. Michael Totty’s February 17, 2008 article in the Wall Street Journal certainly makes a case for the likelihood that the U.S. will get much smarter due to technology advances, economic necessity, consumer desires, and government incentives.

The part about “Smart Grids” caught our attention at Parks Associates. We are preparing to launch a major multi-client project to assess the market for digital systems and services used to monitor, control and manage electric energy in the home. The first step to building a more intelligent electricity distribution network (a.k.a. Smart Grid) is the deployment of smart meters which are digital meters capable of processing and reporting usage data to providers and households via two-way communication between meters and utility offices. Smart meters with the proper user interfaces can enable consumers to make informed decisions in response to real-time household power consumption data.

Data …enter Google. Google wants to build the platform for collecting, managing, and analyzing home energy information. It is one of the more visible companies developing ways to control the demand for electric power as an alternative to building more power generation plants. It recently announced that it has developed a free Web service called PowerMeter that enables consumers to track and, with the proper devices, control energy use. As I understand it, PowerMeter is still in Beta testing and the company is counting on others to build devices to feed data into their PowerMeter technology.

Back to smart meters. Smart meters are a key enabler of Google’s technology and the company has referred to expected deployments of 40 million or so smart meters as mentioned in a White House document entitled: The American Reinvestment and Recovery Plan – By the Numbers. That’s quite different from Parks Associates’ current smart meter forecast which we published on February 10, 2008, the same day Google announced PowerMeter. (See Figure)

Several reporters questioned our rationale for such a modest forecast for smart meters. Why the discrepancy? Did we miss something? We don’t think so, but we are going to be investigating the facts behind deployment plans in depth over the next couple of months. Forecasting the installation of smart meters in the residential market requires consideration of several factors beyond summing up proposed deployments:

• Ability of utilities to fund deployment of smart meters and the necessary AMI infrastructure
• The willingness of local governing bodies, e.g., public utility commissions (PUCs), to approve rate structures that make smart meters attractive to consumers and the utilities
• The utilities’ willingness to commit to long-term deployments

The economic stimulus plan will encourage a more rapid development of a smart grid, but many questions remain to be answered about just how fast this will happen. No timetable was given for the deployment of the 40 million meters mentioned. Our forecast is based on a tally of deployment announcements along with estimates of the portion going into residential versus commercial accounts. In addition, we did take judgment on some plans due to where they were in the regulatory approval process. Therefore, we believe we have a solid rationale for our forecast.

However, we expect this forecast to change. Companies such as Google, with the ability to build market awareness, can help accelerate adoption of systems and services to manage and control energy consumption. In fact, we think that there are numerous market opportunities in residential energy management that don’t require smart meters or an advanced metering infrastructure (AMI). We will be exploring the entire spectrum of opportunities in our project entitled Residential Energy Management – Opportunities for Digital Systems and Services which is designed to help our clients Get Smart.