What to Watch For in 2010: How Utilities Will Enable ZigBee

Here’s an issue that I think will greatly effect startups building the next-generation of home energy management tools over the next couple of months: Many utilities won’t be turning on the wireless communication chips (most often the wireless standard ZigBee) in their smart meters until well into 2010, and it will be a very controlled process. Some utilities will have ZigBee chips disabled throughout the months of installation and then plan to enable all of the ZigBee functionality in one go, potentially upgrading the meters with the latest software.

Why is that important? Well, for startups and companies that are building their businesses off of being able to wirelessly connect with smart meters in homes (yet another tool we reported on last night), they’ll have to wait for some utilities to install all of their meters, do complete testing, and then enable the home wireless communication. That could take a very long time.

Sacramento Municipal Utility District’s (SMUD) Smart Meter Project Manager Erik Krause told us via email that all SMUD smart meters will use the ZigBee wireless communication, but that ZigBee will not be enabled during deployment. SMUD will then test ZigBee in “a limited fashion” during March 2010, but SMUD has no “specific timeline for activating/upgrading the chips with ZigBee at this time.”

For Southern California Edison (SCE), the utility won’t have ZigBee in its smart meters disabled throughout deployment, but SCE doesn’t plan to pilot any approved home energy management devices until after mid-2010 when it is doing a software upgrade for all of its smart meters. SMUD’s Krause says utilities are also waiting for ZigBee 2.0 — which has some advanced features and improved security — to be released next year.

On one hand, it’s natural for utilities to be cautious about new network infrastructure and want to move slowly — they’re trying to control the edge of the network (where the consumer and startups connect to it). But the tactic is also reminiscent of the early Internet and phone companies that offered poor customer experiences by controlling the edge of the network too closely (in telecom world that’s called the walled garden).

I just hope that utilities don’t end up making an environment where home energy management products have to go through a lengthy and burdensome approval process to connect to utilities’ ZigBee smart meters. That could add a lot of unnecessary cost and stifle innovation. If the process isn’t developer friendly, then companies will avoid the smart meter and instead opt to get energy information through devices like a TED, where the utility isn’t involved.

The startups that are building home energy management tools and cut their teeth on the dotcom boom won’t like the controlled home energy management rollout too much. They might be wise, however, to ask for advice from their peers in the mobile world that have found success with selling to carriers.

But at the end of the day the utility universe isn’t the Internet or mobile world. As Clint Wheelock from Pike Research explained to me in an email, utilities are the key enabler and channel for home energy management, and “utilities will want to plan their launch of home energy management very carefully for purposes of consistent, large-scale customer communications and to ensure that their customer support teams are ready.” Customer service is a real hot button issue for utilities in terms of home energy management, says Wheelock.

To be sure, it’s a fine balance between offering customers quality products and strong customer service, as well as offering them the best, and most innovative products available. It will be interesting to see in 2010 how this balance works out.

Image courtesy of Martcatnoc’s Flickr Creative Commons.


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