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.

Energy management, entertainment systems control, and remote home monitoring to drive adoption of home controls

Three applications will drive adoption of control systems over the next five years: energy management, entertainment systems and content control, and remote home self-monitoring. Consumers see the value in these areas, which, once established, can serve as the base for expanded control systems in the home.

Parks Associates new report Home Systems: Home Controls – Analysis and Forecasts finds low consumer awareness and a shortage of affordable installation services currently hinder widespread adoption. The entry of well-known players, including ADT, Best Buy, Radio Shack, and Schlage, will help grow this market, but players should focus their value proposition on specific, easily understood applications in order to build consumer awareness and lay the foundation for future expansion.

For example, as entertainment controls for home theater and audio systems become more affordable, penetration will expand from 5% of U.S. households to 17% by 2014. These systems can then be expanded to integrate lighting, window treatments, and security controls, a strategy that will help push penetration of control systems overall to almost 20% of households by 2014.

Security Monitoring Fees for U.S. households have increased 15% since 2007

Home security companies have avoided the worst of the recession due to a stable core of consumers who have kept their monitoring services despite rising fees.

In a recent report Home Systems: Home Security - Analysis and Forecasts, Parks Associates finds the average monitoring fee for a U.S. household increased from $28.60 to $32 between 2008 and 2010. This rise has kept revenues from home security relatively stable, despite declines in overall sales due to weak home sales and catastrophic drops in new starts. This strategy relies on a group of existing customers who will retain their service despite rising monthly costs, which has been successful but has its limits.

IP technologies open the door on all industries to new, nontraditional competitors. Moving forward, the security industry must be careful not to raise monthly fees too quickly, or it risks accelerating entry of these new players. Continued aggressive fee increases may create short-term benefits but risk long-term turbulence. Instead, security companies need to reposition to win new customers, rather than expecting their existing customers to carry the burden.

Integrators and Home Networking

Each year, Parks Associates surveys installing dealers throughout the U.S. through its ongoing Channel and Consumer Monitor project, and as we launch our 2010 survey this week, we are taking a look at some of the more prominent trends over the past few years and how they are impacting the dealer market and related industries.

One significant trend has been the rising awareness of home networking, specifically no-new-wires networking technologies as valuable solutions for dealers' businesses. For example, based on our last survey, more than one-half of integrators are familiar with Wi-Fi (based on the 802.11n standard), and 19% are familiar with at least one type of powerline connectivity media (e.g., HomePlug, Powerline HD, HD-PLC).

Want to know more? Click here to subscribe to the Home Systems Monthly Newsletter from Parks Associates.

50% of U.S. households are interested in home energy monitoring

Home monitoring and controls companies will need to take alternate, more indirect routes to reach mass-market status, according to international research firm Parks Associates.

Almost 50% of U.S. households are very interested in an energy-monitoring device, with nearly 80% willing to pay $100 provided it saves 10-30% on their electricity bill. Energy applications are popular now because of the need for cost savings, but in the end, all home systems will need to be interconnected. By embedding their technologies into energy-related appliances and systems, controls and monitoring companies can get a foothold in the home and start to build traction on a mass scale with consumers.

Controls and monitoring companies can form strategic partnerships with system manufacturers, service providers, and utilities to build these inroads. Many utilities have smart grid programs, which have partnership opportunities, but the popularity of energy solutions has attracted new, nontraditional players. For example, Intel recently announced a sensor that monitors power usage throughout a home and shows the homeowner the amount of power used by different appliances and systems.

U.S. consumers still unaware of smart grid benefits

Parks Associates research indicates over 40% of consumers unfamiliar with term “Smart Grid.”

Consumer knowledge of smart grid technologies is low, even as utilities have deployed 13 million smart meters to U.S. households. In the report, “Residential Energy Management: Opportunities for Digital Systems and Services,” only 11% of U.S. consumers are familiar with the term “Smart Grid.” This low awareness poses a risk to future deployment plans and opens the door for communications service providers to grab market share from utilities by offering their own energy monitoring solutions.

Utilities plan to deploy more than 50 million smart meters by 2014, but they need to improve their educational outreach if they want consumers to embrace this technology.

Consumers in Texas and California have filed lawsuits in which they blame smart meters for unexpected hikes in their electricity bills. The backlash from these stories threatens customer compliance with future smart grid deployments and could disrupt utility plans to create a more robust, interconnected grid that offers advanced services such as monitoring and time-of-use billing.

Home controls and the Trojan Horse

Throughout its 24 years of history, Parks Associates has been grappling with the question of when and how home control systems will become mainstream.

Home systems analyst Bill Ablondi, in Parks Associates’ most recent report, Home Systems: Home Controls-- Analysis and Forecasts flips the question. Ablondi and colleague Farhan Abid say that the current value propositions for consumers to purchase control systems are not sufficient to appeal to mass markets. Either the systems are too expensive for a cost conscious home buyer, are too complicated to install, or though appealing, don’t sufficiently wow a mainstream home owner into a purchase decision. The path to adoption, therefore, is for control systems companies to get their technology installed in the systems that we are already buying for our homes. If control companies will partner with systems companies such as Trane, Honeywell, GE, Sony, Whirlpool, Logitech and others in order to incorporate their technologies into TVs, refrigerators, remote controls, thermostats and other established systems, then the consumer can simply enable the control application that, like a welcomed Trojan Horse, has already entered the home.

If a consumer could download a smartphone app or TV widget to enable the control capabilities built into home systems, they would suddenly discover the value proposition first-hand and potentially provide control systems vendors with the holy grail of revenue models – a monthly subscription fee.

Parks Associates Analysts speaking at Broadband Properties Summit 2010

Parks Associates is supporting and speaking at the upcoming Broadband Properties Summit from April 26th-28th in Dallas, Texas.

Harry Wang, Director, Health & Mobile Product Research, Parks Associates, is moderating the panel, "The Growth of Telemedicine in FTTH Communities" on Tuesday, April 27 from 8:00 a.m. – 8:50 a.m.

Bill Ablondi, Director Home Systems, Parks Associates, is moderating the panel, "How FTTH Enables the Smart Grid" on Tuesday, April 27 from 3:50 p.m. - 4:50 p.m.

The 7th annual Broadband Properties Summit is the premier fiber-to-the-premises industry event. Each year, it enables a comprehensive look at the FTTP landscape, from today’s success stories to tomorrow’s deployments, technology, and consumer demands. More Info

U.S. Electronic Systems Contractors optimistic about business prospects in 2010

On average, U.S. home systems integrators, who have had revenues fall for the past two years, expect sales to pick up by more than 9% in 2010 over 2009, according to Home Systems: Channel and Consumer Monitor.

This report includes results of a fourth-quarter 2009 survey of integrators installing home controls, entertainment systems, and energy management solutions, conducted as a joint effort from international research firm Parks Associates and the Custom Electronic Design & Installation Association (CEDIA).

Home Systems: Channel and Consumer Monitor reports that integrators continue to generate two-thirds of their revenue from A/V systems but many integrators plan to diversity in 2010 by adding lighting controls and solar panels to their 2010 offerings. Approximately 40% of integrators plan to begin installing photovoltaic solar panels, and another 38% are seeking more information on this product category to determine its viability. In addition, the trend toward more retrofit projects, which accounted for 63% of 2009 revenues, will continue.

Visit www.parksassociates.com for more information on Home Systems: Channel and Consumer Monitor.

CONNECTIONS™ to focus on business strategies, new connectivity solutions in Digital Living Markets

Parks Associates announced the Call For Papers for the upcoming CONNECTIONS™: The Digital Living Conference and Showcase. The 2010 conference will take place June 8-10 at the Santa Clara Convention Center.

The main topic areas for the event are Entertainment Platforms & Value-Added Services, New Media and Digital Content, Consumer Electronics, and Home Systems & Controls.

Emerging technologies continue to change the digital living landscape. Mobile applications are increasing the role of service providers, who are adding home controls, energy management, and entertainment offerings to their platforms. Online video is radically transforming the roles of the TV and the game console, while Blu-ray and video kiosks are reshaping the distribution channel for physical media. At this point, we don’t know which business models will ultimately prevail.

CONNECTIONS™ will address the opportunities and challenges in connected CE, 3D TV, smart grid and energy management solutions, consumer and technical support, smartphones and mobile services, social media, and content management.

For fourteen years, CONNECTIONS™ has been the premier event for research and analysis of connected home technologies and digital living solutions. The executive conference features consumer research and presentations from international research firm Parks Associates and a comprehensive agenda with over 80 speakers. Past conferences featured keynotes from AT&T, Verizon, Sony, Intel, and Microsoft.

Submission Deadline is January 30, 2010.

Smart Energy Summit to focus on in-home energy management and control solutions

U.S. Department of Commerce, Austin Energy to keynote conference --

International research firm Parks Associates announced the preliminary agenda and current speakers, sponsors, and advisory board for the Smart Energy Summit: Engaging the Consumer. This conference, hosted in cooperation with Austin Energy on January 25-27 at the Hyatt Regency in Austin, Tex., focuses on opportunities in residential energy management and the challenges of bringing Smart Grid technologies to U.S. households.

Sessions include the latest consumer research from Parks Associates’ landmark Residential Energy Management service, which surveys both consumers and utilities on attitudes and trends in this growing industry. Early sponsors for Smart Energy Summit include Direct Energy, Exceptional Innovation, HAI, iControl Networks, and OpenPeak. Event supporters include AltEnergyMag, CABA, Energy Priorities, Home Toys, SmartGrid Today, VB/Research, and WinSmartGrid.

Andres Carvallo, CIO, Austin Energy, will present the keynote “A New Journey: Utility 2.0” on Tuesday, January 26 at 9:30 a.m. He will share his vision of the utility of the future, informed by his company’s experiences developing and deploying its Smart Grid, and highlight new paradigms of business models and technologies that will transform consumers into “prosumers” - producers and consumers all in one.

Dr. George W. Arnold, National Coordinator for Smart Grid Interoperability, National Institute of Standards and Technology, U.S. Department of Commerce, will also be a keynote speaker at the conference.

Confirmed speakers:

- Susan Cashen, VP, Marketing, Control4
- Steve Cashman, Chief Strategy Officer, Exceptional Innovation
- David Dollihite, VP, Direct Energy
- David Friedman, Senior Director, Strategic Marketing, ZeroG Wireless, Inc.
- Dan Gittleman, Chairman & CEO, OpenPeak
- Vince Groff, Executive Director, Cox Communications
- Jim Johnson, President & CEO, uControl
- Thomas Pickral, Business Development, HAI

The Smart Energy Summit Advisory Board provides input into the design and content of the event, focusing particularly on the market opportunities and business issues associated with engaging the consumer in energy management. Current Advisory Board participants:

- Andres Carvallo, Chief Information Officer, Austin Energy
- Steve Cashman, Chief Strategy Officer, Exceptional Innovation
- Ken Wacks, Member, GridWise Architecture Council, U.S. Department of Energy
- Brian Woods, CMO, OpenPeak

For more information, visit www.smartenergysummit2010.com.

Residential gateways and home networks to open new revenue streams for service providers

Service providers will see a quick return on investment and be able to build new profits through residential gateway (RG) deployments, which will account for over 50% of all global home networks by 2013, according to Connected Home: Global Outlook.

This new report from international research firm Parks Associates finds U.S. broadband households with a home network from their service provider show a spike in interest in enhanced services such as home network tech support, managed Internet security and parental controls, and online file backup.

Connected Home: Global Outlook analyzes the worldwide market for home network deployments from broadband service providers, including the role of the RG and related solutions in reducing operational expenses, increasing customer satisfaction, and expanding connected home value-added services and features.

For the full press release, visit newsroom.parksassociates.com

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.

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.

Cable and IPTV VoD resistant to economic trends, revenues to exceed $11 billion in 2013

Parks Associates workshop offers strategies to monetize video services, digital devices, energy management, advertising --

With U.S. households reluctant to cancel home services despite the down economy, growth in cable and IPTV VoD services will remain strong, with revenues exceeding $11 billion by 2013, according to Parks Associates. The international research firm is hosting the pre-show workshop Monetizing Connectivity in the Home on June 2, 2009, at CONNECTIONS™, to analyze the opportunities and successful business strategies for advanced products and services.

CONNECTIONS™: The Digital Living Conference and Showcase, taking place in Santa Clara, Calif., June 2-4, tracks developments, trends, and opportunities in the four key areas Communications & Entertainment Services, New Media and Digital Content, Home Systems, and Consumer Electronics. The Parks Associates pre-show workshop is an excellent primer to the event and includes research and forecasts for interactive video services, mobile solutions, energy management, advertising, and connected devices.

At the workshop, the Parks Associates analyst team will provide comprehensive insight, analysis, and forecasts of the digital living markets, including consumer research and the best strategies on how to gain and retain customers in a difficult economy.

Workshop Sessions
Unlocking Interactive Television Services
Connected Consumer Electronics – Cloud Media and Servers
Mobile Innovations: Service, Hardware, and Applications
Advertising in a Three-screen World
Digital Home Technical Support
Energy Management

CONNECTIONS™ includes interactive panels with over 80 speakers, moderated by Parks Associates’ expert analysts and featuring the latest research on converging content, services, and hardware. Register now at http://www.connectionsconference.com or contact sales@parksassociates.com, 972-490-1113, for more information.

For information on Digital Lifestyles: 2009 Outlook, visit http://www.parksassociates.com.

Parks Associates supports Broadband Properties Summit 2009

Parks Associates is supporting the Broadband Properties Summit 2009 on April 27-29 at the Hyatt Regency - DFW, Dallas, Texas.

Harry Wang, Director, Health & Mobile Product Research, Parks Associates, is speaking on the panel session Competitive Differentiation and Revenue Generation with Healthcare Services over Fiber, Monday, April 27 from 3:10 PM - 4:00 PM.

Bill Ablondi, Director, Home Systems Research, Parks Associates, is speaking on the opening session Adding Value to Properties to Maximize Revenue on Monday, April 27 from 11:30 AM – 12:20 PM.

Bill Ablondi is also speaking on the panel session Energy Management with Fiber Networks on Tuesday, April 28 from 3:20 PM – 4:20 PM.

Houston's CenterPoint Energy & GE partner to produce Smart Grid System

Houston's CenterPoint Energy and GE team up to produce the Advanced Metering System (AMS) enabling consumers to track and manage electric usage and costs. Utilizing GE Digital Energy's MDS Mercury 3650 radios, AMS will translate electric utility meter info from homes/businesses to the CenterPoint's data center.


With this real time technology, consumers will be able access energy usage/prices and remotely control appliances via the Internet. For March, CenterPoint began installing 145,000+ of these smart meters. By the end of 2009, CenterPoint hopes to update all existing equipment with these new smart meters.


In addition, retail electric providers can offer new consumers products and services after the AMS installation.


For more information, please read K.C. Jones's article "GE Wireless Radios Power Houston Smart Grid Systems" posted to InformationWeek.

Verizon getting into home controls?

According to CNET, Verizon Communications is exploring ways to use its Fios broadband service to give consumers ways to remotely control their thermostat and view their energy usage.

Company engineers are now designing applications, including energy management, to work with the routers that come with its Fios service.

The first application Verizon expects to roll out will be videoconferencing by the end of the year, according to company spokesman Jim Smith, who said home security and energy management are also being considered.

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.

Parks Associates forecasts 6 million homes with Smart Meters by 2012

Residential energy management research addresses market opportunities, initiatives, and consumer preferences --

The market for residential energy management will increase significantly over the next four years due to increased consumer demand and new government and industry initiatives. The number of U.S. households with a smart meter will grow to over six million by 2012, according to Parks Associates.

The international research firm recently announced its new research project Residential Energy Management: Opportunities for Digital Systems and Services, which analyzes this market, current and future deployments, and consumer preferences.

Parks Associates reports that over one-half of U.S. households take steps to conserve energy. The impact of this consumer behavior has broad implications for multiple players, from appliance manufacturers to venture capitalists. Already, a strong majority of U.S. builders recognize energy-efficient amenities as the most positive influencers in selling a home.

Residential Energy Management features multiple components, including an online survey of 1,500 U.S. households regarding their use and awareness of smart meters. The project also includes profiles of innovative companies and utilities in this sector, interviews with government officials, forecasts for AMI deployments and energy-saving products and services, and a report on international activities in energy management.

For more information, click here.