Honeywell, the dominant maker of thermostats, continues to flex its muscles in home energy management (HEM) as it tries to fend off upstarts like Nest Labs, EcoFactor, and EnergyHub.

Honeywell is building out its products and solutions in the ways that big companies do in order to maintain a lead when rivals threaten its turf.  For its utility partners, Honeywell recently upgraded its home energy assessment program with the launch of its Residential Energy Assessment Tool, a set of software that helps technicians show homeowners ways of finding more energy savings.  The tool enables a technician to immediately share audit results which can help drive speedier upgrades.

In thermostats, Honeywell launched one of its latest Wi-Fi-enabled models last summer, aimed at do-it-yourselfers.  And the company is planning to release similar devices with enhanced features in 2013.  In addition, the company continues to work with Opower on Web-connected programmable thermostats in order to help consumers save energy and reduce costs.  Early results from customers testing the Honeywell-Opower setup have been encouraging.

In addition, Honeywell continues to tinker with new ways of helping consumers cut their energy bills.  Its context-aware smart home energy manager (CASHEM) project is more than halfway to completion, and the early results are promising.  The energy monitoring system dynamically schedules home appliances and makes adjustments according to certain conditions and homeowner preferences. One family testing the system was able to reduce its monthly energy bill by $100.  The project is funded in part by a Department of Energy grant of $1.6 million.

Nonetheless, Honeywell’s competitors, Nest in particular, continue to make inroads.  Nest’s iPod-like thermostat has been a favorite among early-adopting consumers over the last year, giving Honeywell a headache that won’t go away.  The two companies are locked in a legal dispute over alleged patent infringement, and the outcome of that battle could be months, or even years, away.

Looking ahead at 2013, Honeywell will keep pushing forward on many fronts in home energy management (see Pike Research’s two recent reports, Home Energy Management and Home Area Networks) as it tries to keep upstarts at bay.  And though Honeywell may not always appreciate the push it is getting from rivals, the competition is good for the company and good for consumers.