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Are Consumers Ready for Home Energy Management in 2011?

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Is 2011 the year consumers will finally warm to using gadgets and software to manage their home energy consumption? Well, startups like Tendril, Control4 and others are using the opportunity of the smart grid DistribuTECH show in San Diego, Calif. this week to tout new deals and partnerships they hope will start to build up the home energy management market.

Tendril, which makes software and devices to connect utilities and consumers via the smart grid, announced a collaboration on Monday morning to work with appliance giant Whirlpool (s WHR) on smart appliances. Tendril says it will provide the back-end communications infrastructure that will connect Whirlpool’s digital appliances — like refrigerators, dishwashers and laundry machines — to utilities.

Tendril says “as many as one million appliances will be smart grid-enabled,” through the collaboration. The partnership is clearly a win for Tendril, however Tendril has made similar announcements with well-known partners like GE (who also made an equity investment in the company) and I haven’t seen many products yet come out of the GE (s ge) deal (GE ended up launching its own energy management tools).

At the same time, home energy startup Control4 says this morning it has a new deal to provide its home energy gear and service to Nevada utility NV Energy. Control4 says NV Energy will provide at least 20,000 of Control4’s home energy devices and software to its customers this year. In the utility world, 20,000 home energy devices is a sizable deployment, and Control4 called the deal “the first true rollout — not a pilot — of customer-driven demand response using home area network technologies.”

NV Energy will use Control4’s tools to do residential demand response, which is basically asking customers to turn down their energy in various ways when the utility wants to more tightly manage the grid’s power use. In exchange for turning down their energy use, customers who participate in the demand response programs can get rebates and lower power rates.

These two deals represent a maturing of the home energy management market and a way for startups like Tendril and Control4 to make some real headway. Both appliance makers and utilities move at notoriously slow paces, so these markets have taken years to unfold.

At the same time service providers, like telcos, have finally taken notice of the home energy market, too. Verizon (s vz) launched a pilot program this month — the first of its kind in the U.S. — that offers home automation and energy management services via a company called 4Home, which was bought by Motorola (s mmi) at the end of last year. AT&T (s t) also bought a company called Xanboo last year that offers similar home automation services.

Consumer electronics companies are also slowly moving into the market in 2011. Belkin has been at the forefront of the energy-efficient home device movement, launching its Conserve brand and buying a startup called Zensi.

Is the market for home energy management tools on the path to hit Pike Research’s prediction that by 2015, 28 million homeowners around the world will be using some kind of high-tech tool to manage their energy use? Pike also says that the smart appliance market will hit $26.1 billion by 2019, with some 118 million smart devices deployed to make up about 8 percent of the world’s market. 2011 will be a crucial year that will help determine these figures.

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11 Responses to “Are Consumers Ready for Home Energy Management in 2011?”

  1. Consumers are ready. The problem is, utilities are not. Here in NYC, conEd has been running a smart grid pilot program in which I have participated for the last year. I received a very sleek, iPad-like device that operates wirelessly and looks great in any room of the house. I was eager to use it, but it helps me to reduce neither energy consumption nor cost: Since there is no information about which home appliance consumes how much power, I don’t know which appliance usage to lower. Since ConEd charges the same rate for electricity regardless of time of day or day of week, scheduling appliance for dish washers, washing machines, etc. has no benefit to the consumer.

    Without actionable information and real-time consumer incentives to take action, “smart grid” implementations just pay lip service to a greener future.

  2. Katie another company in this space is Home Automation Inc. (HAI) []. HAI has a Smart Grid program and they announced this week a program similar to Control4’s in New Orleans.

    In answer to your question, no consumers are not ready. Yes, they have changed out good easy on the eyes incandescent lamps for poor quality, cheap CFL’s obtained from the local utility for free or from Walmart for two bucks. However, they are not ready for a $300.00+ cost to allow load shedding interfaces for the high draw appliances and HVAC equipment. Until the price points come down or utilities begin tiered pricing based on time of use, most consumers will install funny looking lamps and pray for lower costs.

  3. Katie:
    Another company that is working closely in this space is Home Automation Inc. (HAI) []. They announced yesterday (February 1st) a program in New Orleans similar to the Control4 program in Las Vegas. Here in West Central Ohio, I have customers installing energy monitors that they are purchasing on the internet and American Electric Power (A.E.P.) has announced another Control4 pilot program in north central Ohio. Most current consumers are looking for ways to reduce costs, i.e. electric and gas bills. They have embraced poor lighting by installing the cheap CFL’s from Walmart or the give-a-ways from the power company, but still are not interested in spending $300+ per large energy hogs to install auto load shedding controls to shut down electric dryers, water heaters, and set back a/c units during peak periods. Verizon and A T & T entering this market will help drive more interest, but only in areas that they serve. Control4 and HAI both have excellent products today that work independently from the Grid and in the future will connect via HAN by zigbee protocol. However, until the price points drop or utilities begin tiered pricing, most consumers will continue to just change light bulbs and hope their bills go down.