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Summary:

The cloud can make home energy management both cheap and powerful. But what if it turns out to run afoul of real — or imagined — privacy concerns?

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Tapping “the cloud” could help make home energy management both cheap and powerful. That’s because storing energy data in remote servers, and not in home devices, could mean less up-front investment in home gear, which will means cheaper systems. But could privacy concerns nip that potential in the bud?

Porting all that customer energy data to far-off servers and data centers for processing could open customers and utilities up to risk of privacy breaches, unless protections are built in from the ground up, according to some industry execs. In my weekly update at GigaOm Pro (subscription required), I lay out these concerns via comments made to me last week by Intel’s Shahram Mehraban, who’s working on the chip giant’s Home Energy Dashboard product.

Mehraban says that the dashboard Intel is thinking of building, or farming out to OEMs, will be powerful enough to accomplish a host of analytic and data-crunching tasks on its own, primarily to avoid the complications of letting that data out of homeowners’ control.

“Because of the performance of the Intel processor, we’re doing a lot of sophisticated analysis on the dashboard itself… we think this is the right thing to do for consumers,” he told me. “The raw data that’s captured from the home is the property of the homeowner, and lots of homeowners are worried about letting that outside the four walls.”

Intel’s list of in-device tasks — things like differentiating different appliances by using electrical signatures from household wiring, or devising power control routines and settings without customer input — aren’t unique to Intel. Many other home energy management companies have similar tasks on their checklists.

But not many want to add the extra costs involved in giving their home dashboards the beefed-up computing power and memory to do them on-site. Instead, startups including People Power, AlertMe, EcoFactor, Incenergy, Intamac and others are turning to the cloud to manage more complex and data-intensive tasks. Some of them are coming in with in-home platforms in the $100 to $200 range. Intel has tended to set $200 as a minimum for its system, with added features adding costs.

But how to keep all that data safe when it’s out in the cloud? The challenge isn’t limited to startups. Similar complications could arise for home energy platforms from IT giants perfectly capable of hosting their own highly secure remote computing environments, such as Google’s PowerMeter and Microsoft’s Hohm. After all, the issues surrounding homeowner energy data privacy are as political — or in some cases, as psychological — as they are technical. As Mehraban told me, ““We certainly don’t want to have the same kind of market backlash we’ve seen with smart meters.”

The problem could expand beyond homeowner-facing applications. Take eMeter’s recent collaboration with Verizon to host meter data management software in the cloud. While moving from a utility data center to one secured by a company like Verizon wouldn’t seem like a big change, eMeter CEO Gary Bloom said it’s taken a long time for the utility industry to get ready for it.

“Utilities have not been big consumers of cloud technology for anything that touches their customer base or their business side,” he told me last week. Primarily that’s because it hasn’t been on offer, he said, but privacy and security have also loomed large in utilities’ concerns.

It would appear that some of the heavyweights in the home energy management space are also preparing for a world in which data stays within the home’s four walls. General Electric’s Nucleus home energy hub, for example, has enough memory to store three years of energy data on its own.

At the same time, GE is a partner in the “Privacy by Design” approach taken by Canadian utility Hydro One to build a private and secure back-end system to manage GE smart meters and home energy management systems and deliver time-of-use prices to hundreds of thousands of customers. That approach calls for only authorized Hydro One employees to have access to any data coming from customers homes. How would that rule apply to third party home devices or networks — or household energy data hosted in the cloud? I’ll be doing much more reporting on these issues in the weeks and months to come — stay tuned for more details, and let me know what you think.

For more research on smart grid and data issues check out GigaOM Pro (subscription required):

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  1. Our GreenDash home energy monitoring software platform can give consumers the best of all worlds: low cost OEM hardware (as low as $0 if a feature of a router, rather than a standalone energy gateway), the flexibility of cloud services for adding functionality over time, yet total data privacy via our GridLock technology (http://bit.ly/i0bkAP). No need for extra screens just for energy management either.

    Our partition of functionality between the cloud and the gateway device is different to most – it’s a cloud assisted real-time embedded system for delivering personalized dashboards to your existing screens (PC, phone, tablet, TV). It’s that unique partitioning that allows GridLock to keep the user’s data private, which we believe should be the default for sensitive real-time energy data.

    Kevin Strong, CEO, FutureDash Corp.

  2. The U.K.’s Nationwide Smart Meter Cloud Plans: Cleantech News and Analysis « Wednesday, March 23, 2011

    [...] challenge, as well as a business and regulatory challenge in making it pay for itself while maintaining the security and privacy demanded by the governing entities in charge of it [...]

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