Navigant Research Blog

LIFX Reinvents the Light Bulb

— September 24, 2012

Have you ever thought about “experiencing” your light bulbs?  Not many of us would admit to it, but a couple of guys from a Melbourne garage did, and they are redefining the soul of lighting applications in a way unseen since the Savoy Theatre first lit up in the late 1800s.  Their goal is to make energy-efficient light bulbs sexy.  Launched on Kickstarter on September 15th, 2012, the project, “LIFX: The Light Bulb Reinvented,” has already pulled down $1.3 million from almost 9,000 backers – and the funding period runs until November 14th.  Since their initial goal was to raise $100,000 to back the first release of “the smartest light bulb you’ve ever experienced,” it looks like the LIFX Labs dream of reinventing the light bulb may become a reality.

Basically, Bosua has applied the Internet model of persistent connectivity to illumination.  LIFX uses both WiFi (802.11n) and IEEE 802.15.4 (which ZigBee also employs) to create a mesh network of light bulbs that are efficient (LED lights are highly energy efficient and have a long service life), multi-colored, and can be finely controlled with an iPhone or Android device.  To create the network, a master bulb connects to a standard router, which then communicates with all the other bulbs in the network using the open LIFX protocol.  The company plans to provide a software development kit and a hacker kit, so app developers will be able to create new experiences for the owners of LIFX bulbs.

Driven to reduce the wastage created by existing lighting technologies, Phil Bosua, the inventor of LIFX, tapped into the secret of creative explosion — he got out of the way.  When I talked to Bosua, I was struck by how he and his team put their biases aside to associate seemingly unrelated concepts to help create a better light bulb design:  light switches are boring, smartphones are cool, saving money is good, and mood lighting is sexy.  Bosua says, “The guiding force wasn’t cleantech, but to make a light bulb that fit into the culture.  The cleantech technology happened to be the best technology.”

Utilities and social scientists have been trying to figure out for years how to engage consumers in taking energy efficiency measures, including giving away compact fluorescent lightbulbs (CFLs).  And, to be sure, it’s likely that (at least initially) LIFX will be out of reach for many homeowners at about $69 a bulb, or in a kit of 1 master and 3 slaves for about $49.00 for each bulb.  However, unlike with CFLs, which have strange colors, long run-up time and excitable mercury vapor, with LIFX LEDs we can anticipate energy savings of up to 75% to 80%, have access to control applications from our favorite app store, enjoy high quality light, and avoid shopping for new bulbs for 25 years.

Without expensive studies and pilots, LIFX understood the emerging home environment as the context for their market.  After all, when’s the last time you got off your couch to change the channel?  Why shouldn’t it be the same for the lights in our homes?  The Kickstarter audience overlaps precisely with the demographic adopting smartphones in increasing numbers.  By imaginatively and emotionally connecting with their potential market, LIFX turned on thousands of people willing to give their attention and money to their cause – and may turn on energy-efficient lighting in the process.


Energy-Strapped India Looks to New Technologies

— September 18, 2012

The ability of electric vehicle batteries to interact with the grid has been one of the more exciting promises of the EV industry.  The spread of EVs, along with the growth of smart communications software, has brought along with it new ways to take advantage of the energy storage capabilities of vehicle batteries.  Though this technology is exciting, questions remain concerning its actual utility and economics.

In Hot, Flat, and Crowded, Thomas Friedman described how this technology would allow everyday motorists to participate in wholesale energy markets while hooked into the grid at places as simple parking garages.  EV owners can charge the vehicle at night when prices are low per kilowatt-hour (kWh), and then discharge the power onto the grid during the day when prices are high.  That’s known as energy arbitrage.

The above dynamic may come eventually, but it will require a great deal of electricity market deregulation and increased adoption of dynamic pricing plans by utilities before the infrastructure investments begin to take place.  Further, managing a system in which the participating vehicle will at some point need to drive away presents other interesting challenges.  Until the wider public market has been enabled, energy arbitrage will be an opportunity best harnessed by commercial fleet operators who can leverage far greater kWh capacities and better manage vehicle schedules.  Near term uses for the technology will likely focus on providing an alternative to diesel generation sets for emergency back-up power, for which the biggest market is India.

Northern India’s historic blackouts at the end of July left a population around twice that of the United States without power.  Unfortunately power outages are common in India, which makes diesel generators almost obligatory for any small business.  As can be expected, during the blackout, demand for diesel surged as thousands of generators jumped in where the grid left off.  For small businesses, neither the fuel nor the generator is cheap;  diesel prices in India are around $3.10/gallon (U.S.) and new 15 kW generators can cost around $5,000.  On the other hand, bidirectional charging upgrades to existing Level 2 electric vehicle charging equipment (EVCE) are estimated to be around $500 to $1,000, and can supply max power of 7.2 kW.

To be clear, besides having significant issues with grid reliability, India at this point has no existing EVCE infrastructure and barely has an EV industry.  The country, however, appears to be motivated to confront these challenges: Prime Minister Manmohan Singh has outlined a  $400 billion plan to improve grid reliability, and the government just recently passed a $4 billion (U.S.) plan to boost electric and hybrid vehicle production, with the goal of putting between 4 and 5 million of the vehicles on Indian roads by 2020.

The momentum for a rebirth of the Indian electric infrastructure comes at a time when vehicle to building (V2B) technologies are just being introduced by Nuvve, and major Automakers Nissan, Toyota, and Honda.  Though India is still a nascent EV and EVCE market, both the government and small business could profit greatly from V2B investments.  Further, creating an additional way for Indian small business owners to maximize the value of their costly EV purchase could be fundamental to EV sales growth, and therefore critical to helping the country reach that 4 to 5 million vehicle goal by 2020.


You Paid How Much for that Parking Space?

— September 18, 2012

Smart parking management looks to be the next big market opportunity in smart cities solutions.  Pike Research covered the topic in last year’s Smart Cities and Smart Transportation Systems reports, as well as our recent Smart Cities and Transportation webinar.  As my colleague Eric Woods remarked, parking may be a mundane issue, but it’s a major headache for drivers in congested cities – not to mention a potential lever for cities looking to modify traffic patterns and driver behavior.  UCLA professor and parking guru Donald Shoup estimated that 950,000 excess miles a year are likely driven in Los Angeles due to people looking for free or cheap metered parking.

Thanks to the increasing availability of wireless networks, sensors, smart meters, and smartphones, a handful of cities are implementing smart parking systems that can manage parking in real time.  San Francisco was one of the first U.S. cities to give it a try, with help from a U.S. Department of Transportation grant.  The pilot project, called SFPark, was launched in April 2011. The city deployed around 12,000 sensors in curbside and garaged parking spaces.  The city also deployed roadway sensors so they could gather data on whether congestion was affected by the new parking system.  Technology partners included ACS, StreetSmart Technology, and Sensys Networks for the sensors; IPS Group and Duncan Solutions, for the smart meters; and Oracle, for software and the data warehouse.  SFPark created a real-time parking availability data feed and developed web and smart phone apps that map parking availability in real time.

The tool for changing driver behavior, besides providing information, is dynamic pricing.  In the pilot areas, the city varies pricing based on an analysis of demand at various times of day.  The city promised to change meter prices no more than once a month, and by no more than $0.50 per hour lower or $0.25 per hour higher.  Currently, the meter pricing ranges from $0.25 an hour to $6.00 an hour.

I must admit, I was surprised to hear how high the parking price can go.  This brings up one of the potential problems with dynamic pricing.  Not only are people being charged for something that they are used to thinking of as a cheap public good, but the cost can potentially become unaffordable for some people.

So I was also surprised that San Francisco residents, not known for their quiescent nature, haven’t protested. This is likely because they recognize how bad the parking situation is, and also because the city held extensive public meetings to explain the project and incorporate public feedback.  For other cities considering dynamic pricing, I would highly recommend visiting the SFPark website, which has a wealth of resources on lessons learned.

Other cities are trying various forms of smart parking, not all of which include dynamic pricing.  In 2010, Los Angeles deployed a pilot program using technology from startup company Streetline.  Streetline has been on a roll recently, announcing collaborations with IBM and Siemens.  Other major multinationals like Veolia and Telvent are offering smart parking solutions.  As more results come in from pilot projects, this segment of the smart cities market promises to take off.


The Adaptable Utility: In a Darwinian Era, Only Evolving Companies Will Thrive

— September 17, 2012

Utilities are facing a learning curve, but to paraphrase Darwin, it’s not the strongest that will survive, but the most adaptable.  In most utilities, the relationship between the utility and the customer is largely transactional; the provider delivers electricity, gas or water and the customer pays for that service.  However, as the grid modernizes and consumers become increasingly vocal and expressive, asking the customer to interact with the utility in the way that’s easiest and most efficient for the utility is no longer a viable strategy.   Control, persuasion, and influence have run their course; instead, helping consumers achieve benefits efficiently and effectively is at the heart of consumer empowerment and utilities’ success going forward.  (For more on this topic, sign up for this upcoming webinar on Smart Grid News, titled “Lessons from the Real World: Understanding and Engaging with Your Customers,” on September 25.)

The empowerment of energy consumers is an opportunity to drive innovation in the utility that can create operational and competitive advantage (where there is competition) by interacting with people on topics related to energy information, efficiency, safety and new product offerings.  The digitization of the customer voice, powered by individuals’ ability to access information on almost any topic instantly, is a potent determinant for the success of customer relationships.  The interactivity of social networking creates a collective customer experience where customers discover new products together and share their experiences and their opinions.  Anybody who has ever gone to Google for help with a computer problem understands this; like-minded users are often better qualified to help other customers than company employees.

By recognizing the fact that customers can and will advise each other, utilities that seamlessly integrate company expertise in a manner that facilitates customer collaboration will create gratifying experiences for their customers.  As the Smart Grid News webinar will explore, utilities can increase customer satisfaction and loyalty at a lower cost than traditional means of reputation management, differentiation and marketing.  To realize a return on investment from these new processes, utilities must adapt their customer interaction practices and develop systems for the analysis of results that allow for adjustment and fine-tuning of useful and meaningful messages.

Realizing that current marketing practices like “message exposure” and “captive audiences” may in fact be creating worn-out and bored customers is the first step in moving toward customer empowerment.  Utilities must become customer-centric for real engagement to work.  The primary difficulty is accepting that there is a loss of control perceived in turning the organization to an outside-in focus.  This fact underscores the need for a comprehensive approach to creating cultural change that acknowledges the fact that customers are strategic assets, not captive ratepayers.  Adaptable utilities will figure out how to optimize and exploit innovative and emerging application platforms to deliver tailored marketing strategies, tools that make it easy for customers to understand the product offerings that help them modify their consumption patterns, and merchandising techniques that provide information, interaction, and customization.


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