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Is Privacy the Achilles Heel of Cloud-Based Home Energy Management?

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The cloud could make home energy management both cheap and powerful, but could privacy concerns nip that potential in the bud? Storing home energy data in the cloud means less up-front investment in microprocessors and memory for in-home devices — in other words, cheaper systems, which is what homeowners want. But that means sending private data — when people are home or on vacation, how much TV they watch and what appliances they buy — to far-off servers and data centers for processing. That may well ignite customer fears over privacy, which could lead to backlash, unless privacy is built in from the ground up.

That’s one conclusion I reached after talking last week to Intel’s Shahram Mehraban, who is working on the chip giant’s Home Energy Dashboard product. Among his comments, Mehraban said the dashboard will be powerful enough to accomplish a host of analytic and data-crunching tasks on its own — primarily to avoid complications of letting that data out of homeowners’ control.

The list of in-device tasks — things like differentiating appliances by using electrical signatures from household wiring, or devising “home” and “away” routines without customer input — aren’t unique to Intel. Other home energy management companies are working on them, and some of their in-home offerings are in the $100 to $200 range. Intel has tended to set $200 as a minimum for its system, and adding features could boost that price up even higher.

The cheapness imperative has led many startups to avoid the extra costs involved in giving their home dashboards the beefed-up computing power and memory to do complicated tasks on their own, like a computer would. Instead, startups like People Power, AlertMe, EcoFactor, Incenergy, Intamac and others are turning to cloud-based remote platforms to manage more complex, data-intensive tasks. But that means a new level of complication in protecting private data. Similar complications could arise for home energy platforms from IT giants like Google’s PowerMeter and Microsoft’s Hohm. After all, they don’t have perfect track records in dealing with customer data privacy.

The issues surrounding homeowner energy data privacy are as political — or in some cases, as psychological — as they are technical. For example, state utility commissions don’t have legal authority over third-party users of customer energy data. The only way they can enforce any privacy rules they come up with would be to force utilities to set up their own policing systems, which opens them up to costs and responsibilities they don’t want.

At the same time, it’s hard to predict how customers will react to the idea of new data being given out to third parties — even if, as is almost universally the case today, that’s happening only after customers expressly give their permission. Given the continuing backlash over smart meters, there’s probably good reason for utilities to be on their toes.

Intel isn’t the only one making moves to protect itself from future limitations on home energy data. General Electric’s Nucleus home energy hub, for example, has enough memory to store three years of energy data on its own, at a price of $149 to $199 for it, although that doesn’t include the cost of devices to interact with it.

Utility customer data privacy is emerging as a key concern for all kinds of third-party management of utility data. Examples include eMeter’s recent collaboration with Verizon to host meter data management software on the cloud, or SmartSynch’s partnership with PayGo to host prepay meter functionality, or Digi International’s cloud-based M2M smart grid networking system. Adding a lot of new privacy rules to how these new IT systems are run could add costs and complications — but privacy advocates say that preventing privacy breaches are worth the extra cost.

Question of the week

Will privacy concerns limit the adoption of cloud-based storage for home energy?