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GE’s Utility-First Home Energy Strategy

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Homes of the future are probably going to have their fair share of smart appliances, smart thermostats and energy management dashboards with the General Electric label on them. But for now, utilities are the target customers of GE’s push into the energy-smart home.

That’s the news from David McCalpin, general manager of GE’s newly launched Home Energy Management (HEM) business. The new business unit encompasses GE’s line of Brillion brand smart appliances and smart thermostats, its Nucleus energy management platform, and products yet to come, all meant to tie into GE’s smart meters as a gateway to the smart grid.

Back in July, McCalpin told us that four U.S. utilities — Florida Power & Light, Reliant Energy, the Vineyard Energy Project in Martha’s Vineyard, and AEP Columbus — were testing its product suite, along with previous tester Louisville Gas & Electric. GE is also working on a pilot project in Masdar City, and expects to announce a pilot with an unnamed utility in a country in Asia in the coming months, McCalpin said Tuesday.

McCalpin also said in July that GE expected to start selling its Nucleus device to consumers in 2011. But on Tuesday, he said GE’s mass market home energy launch will be limited to some “retail tests” in the second half of next year.

“The consumer will be the end market over time,” he said, but, “until there’s enough critical mass to put products in a retail opening, we’ve decided to restrict the products to the utility channel.”

That makes sense, given the nature of the market, which doesn’t really exist beyond rare and expensive custom systems and utility pilot projects. GE’s Nucleus platform is expected to sell at between $149 to $199, but research indicates that most homeowners aren’t willing to pay more than $50 to $100 for home energy management technology. Indeed, the Nucleus price is much lower than the $1,500 or so that an earlier iteration of GE’s home energy management platform was expected to cost.

Besides that, energy-smart appliances need smart meters or some other gateway to the smart grid to realize their full cost-saving potential. Pike Research predicts that the smart appliance market won’t really take off until the second half of the decade, as “white goods” manufacturers wait for smart grid standards to emerge and an ecosystem of utility smart infrastructure to be put in place.

That’s important, since utilities have a lot to gain from “smart” homes, rather than simply energy efficient homes, McCalpin noted. Utilities are keen to shift household power use from peak demand times such as late afternoons to off-peak nighttime hours, for example — something that only smart devices, hooked up to old-school load control or next-generation smart grid systems, can deliver.

McCalpin cited as one example GE’s GeoSpring hybrid hot water heaters, advertised as nearly two-thirds more energy efficient than old-school heaters. But beyond that, they can also be  automated to shift power use from peak to off-peak times, saving money for end users and utility alike.

While GE does have a complete suite of energy-smart products in the works, it also wants its home energy manager to interact with others on the market. The company is working with home energy startups like Tendril on systems that interface with ZigBee Smart Energy Profile, and has built its own home energy management software on open standards, he said. Still, it’s likely that GE’s in-house system will have functionalities that SEP 1.0 and 2.0 don’t support, he noted.

For more research on home energy management, check out GigaOM Pro (subscription required):

Image courtesy of GEreports via Creative Commons license.

3 Responses to “GE’s Utility-First Home Energy Strategy”

  1. Jeff St. John

    No worries, David — I too am interested in seeing how GE may team up with Ecomagination winners, and not just in the home energy management space. I should note that GE isn’t discounting consumer sales, but rather is saying that utilities remain its chief customers in the short term. Smart appliances in particular seem to be a key linchpin to getting this technology into people’s homes en masse, and as Pike Research and others have noted, those will take some years to roll out.