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Are GE’s Smart Appliances Too Little Too Soon?

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As far as the smart grid is concerned, some would say it’s never too early to dive in. However, GE might have gotten a little ahead of itself with the commercial release of its Hybrid Water Heater.

Outwardly, GE’s water heater certainly looks smarter and less homely than most of the utilitarian units you’ll find in basements and utility closets. It’s pretty smart on the inside too.  There are several modes of operation meant to help homeowners strike a balance between a steady supply of hot water and energy efficiency, all accessible via a touchpad and digital display.  The unit, estimated to cost $1,500, will also save households $320 a year compared to a standard electric water heater, according to GE.  What’s not to like?

For anyone serious about saving energy and lowering their power bills, the coolness factor fades when it comes to smart grid connectivity. Setting aside the fact that it requires a separate add-on module to link with smart meters, the current market for smart appliances is tiny. The reason is that smart meter-equipped homes are few (relatively speaking), plus not every utility offers demand-response and time-of-day pricing schemes to help customers benefit from off-peak power consumption.

These are shortcomings that will be fixed as utilities work to upgrade their grids.  In the meantime GE, Whirlpool and other appliance makers can ready themselves for new market opportunities opened up by millions of soon-to-be smart meter-equipped homes. How?

Savings First and Foremost

As I described last week, residents of Bakersfield, Calif., are up in arms because, instead of saving them money, their new smart meters from PG&E measured out some shockingly high power bills. When it comes to smart appliances, you can bet that customers will demand proof that their purchases will contribute to lower energy bills. Marketing alone won’t cut it; the appliances will need to provide immediate feedback via built-in displays, energy management portals or stand-alone dashboards. Think of it as positive reinforcement. If family members are constantly greeted by a “you saved…” message, chances are that they’ll be more willing to rack up the savings and less likely to override demand-response and pricing signals from utilities.

Settle on a Communications Standards. Now.

GE had to stuff three different types of radios into its smart appliance prototypes to maximize compatibility with smart-metering and home energy systems, adding complexity and cost. Fortunately, there’s a light at the end of this particular tunnel in the form of ZigBee. The Wi-Fi Alliance says it’s making a belated effort, but momentum is clearly on ZigBee’s side.

User Friendliness

As impressive as GE’s new water heater looks, its controls are uninviting and, for lack of a better term, appliance-like.  It can be argued that it’s just a water heater, but in this era of touchscreens and visually-rich UIs, dot matrix LCDs are a decidedly old-school and off-putting way of digging through menus and changing settings.  GE’s failure to carry some the interactivity and appeal of its own smart-grid site to its smart-grid products is not only a ding against the unit’s premium price tag (a typical water heater costs $500), it makes you wonder if there’s some truth to the corporate dysfunction often depicted on “30 Rock.”

Did GE put the cart before the horse?  Yes and no.  Sure, the number of households that will fully benefit from the water heater are few today, but that number has nowhere to go but up. Establishing an early lead and learning to give consumers the energy-saving features they want (and need) will pay off the day consumers are faced with a dizzying array of smart appliances at Home Depot.

Question of the week

What else will companies need to consider in marketing smart appliances to consumers?