Bring Your Own Thermostat Demand Response

Utility Technology Disruption Report

Utilities across the United States have been piloting bring your own thermostat (BYOT) demand response (DR) programs since 2012. These programs have been replacing the legacy direct install strategies that use pre-selected one-way thermostat models. Born in the enterprise mobile industry, BYOT refers to utility policies that allow customers to purchase their own device from multiple potential vendors but still participate in DR and other load curtailing programs managed through the utility. Taking advantage of two-way communicating smart thermostats, BYOT DR programs can help utilities reduce acquisition costs for load curtailment programs and improve customer satisfaction.

Today, 50,000 customers are engaged in utility pilot-scale BYOT DR programs across the United States, representing an estimated $12.5 million market. The total addressable market for BYOT DR programs across the country, meanwhile, is estimated to be 20 million customers, representing a $3.0 billion market. A number of drivers such as lower adoption cost, demand for customer choice, and improved synergies with dynamic pricing programs point toward a potential for BYOT to capture 10% of the residential DR market. However, the resulting decrease in utility control and increase in retail competition will require a rethinking of current utility business models and management systems.

This slide-based Navigant Research Utility Technology Disruption Report examines the BYOT DR market in the United States, with a focus on technology trends, customer adoption, utility rollouts, and the vendor landscape. Cost curve projections and adoption forecasts are provided through 2024, along with estimated customer distribution by U.S. state. Featuring Navigant Research’s Utility Technology Disruption Matrix and Execution Grid, the report also examines implications for traditional utility business models, features utility case studies, and offers strategic recommendations for industry stakeholders to position for long-term success.

Key Questions Addressed:
  • What is the state of smart thermostat technology and how quickly are customers adopting it?
  • What are the market drivers for bring your own thermostat (BYOT) demand response (DR) in the United States?
  • What factors may inhibit BYOT program expansion in the United States?
  • How quickly will BYOT programs grow in various regions around the United States?
  • Who are the major vendors in the BYOT value chain?
  • What are the potential threats and opportunities that BYOT programs present to utilities?
  • What actions can utilities take to benefit from BYOT programs and avoid disruption to existing processes?
Who needs this report?
  • Utilities
  • Smart thermostat vendors
  • Demand response (DR) program implementation vendors
  • DR management system (DRMS) vendors
  • U.S. state regulatory agencies
  • Investor community

 

Table of Contents

Executive Summary

Technology

Overview

Maturity

Geography

Customers

Adoption

Cost vs. Demand

Vendors

Vendor Ecosystem

Utility Partnerships

Disruption

Opportunities & Threats

Strategy

Utility Execution Grid

Business Models

Response

Utility Evolution

Scope of Study

List of Charts and Figures

  • Utility BYOT Deployments, United States: 2010-2015
  • Distribution of BYOT Customers by State: 2020
  • Technology Adoption
  • U.S. Addressable Market
  • Smart Thermostat Cost and Deployment Curve, United States: 2015-2024
  • BYOT Vendor Landscape
  • Utility and Vendor Partnerships
  • Navigant Research Utility Technology Disruption Matrix
  • Navigant Research Utility Execution Grid: BYOT
  • BYOT Business Model Attributes
  • Utility Use Cases

List of Tables

  • Austin Energy’s Power Partner Thermostat Program
  • CenterPoint’s BYOT Pilot Program
  • ComEd’s BYOT and Peak Time Savings Programs
  • Direct Install DR Model
  • BYOT Utility DR Model

Report Details

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