Navigant Research Blog

ZigBee, Thread Find Common Ground

— April 29, 2015

Two key technology groups have taken a step toward interoperability that should make it easier for smart home devices with different capabilities to work in unison in the coming months and years. The ZigBee Alliance and the Thread Group have agreed to collaborate to enable ZigBee devices to operate over Thread’s protocol.

The two groups will define a specification that will allow the ZigBee applications layer to function over Google-backed Thread. The aim is to simplify product development for device manufacturers and give consumers a better experience as they connect devices and services in the home—an early-stage trend often called the Internet of Things (IoT).

New Connections

Specifically, the effort will make it possible for ZigBee devices, such as Philips Hue lights, to connect to a network that natively supports Internet Protocol (IP) addresses, which Thread does. The new specification will be focused on the ZigBee Cluster Library, which standardizes software functionality such as energy use, home automation, and lighting. The new specification is expected to be available sometime after June of this year.

Despite this cooperation, the two organizations are still committed to acting independently, and there’s not yet been any indication that they will merge their efforts. As pointed out by the EE Times, the move can be seen as a defensive one for ZigBee, which has been around for years but has lagged the trend toward 32-bit processors and IP networks.

Plenty of Rivals

In addition, the nascent IoT market still has many players and standards vying for dominance, or at least a significant share of the pie. Besides ZigBee and Thread, Wi-Fi, Bluetooth, Z-Wave, the AllSeen Alliance, the Open Interconnect Consortium, and the Industrial Internet Consortium all have a stake in this ecosystem. In other words, this is a crowded space, and remains fragmented for now.

Even with that fragmentation, utilities and energy management providers need to pay attention to the ZigBee-Thread détente. It could be the needed big step toward device and service interoperability that unleashes a burgeoning market of connected and intelligent devices like thermostats, appliances, and lights. This one move is not going to get it done alone. Others will need to alter their stances, or risk missing out on the expected boom. Of course, Apple could still go it alone with HomeKit, but proprietary solutions are hard to scale. And it is likely that most other vendors will seek more open standards so that the overall market can flourish, and not get stuck in silos.

 

PG&E-Bidgely Pilot Yields Energy Savings, Now It Needs to Scale

— April 20, 2015

Separating energy use in a home down to the appliance level for improving efficiency has long been a goal of technology vendors and utilities alike—some call it a holy grail. The latest effort by California utility Pacific Gas & Electric (PG&E) and partner Bidgely yielded up to 7.7% energy savings among some 850 participants in a pilot program. The results were announced recently and highlight one of several methods aimed at energy load disaggregation.

The PG&E-Bidgely pilot lasted from August through December of last year. Customers who took part were given an in-home energy monitor that gathered real-time electricity consumption data from a smart meter and broke it down by device. For example, the amount of usage by an air conditioner, refrigerator, pool pump, or clothes dryer was broken out along with a cost estimate. The Bidgely system then provided updates and alerts to customers through online access or mobile devices. Armed with this data, customers could take steps to reduce their consumption, such as delaying a dryer cycle until rates were lower or adjusting the air conditioner (AC).

Points of Entry

Other vendors in this space, like PlotWatt and Smappee, offer to analyze and interpret energy consumption down to the appliance level, as well. Both offer ways of detecting appliance-level consumption and utilize a separate device to do so. But unlike Bidgely, these companies are not focused on utilities as their market point of entry. PlotWatt aims its service at residential customers and restaurants, while Belgium-based Smappee is going direct to consumers for now.

The other big player working to help utilities’ customers reduce consumption is Opower. Though it does not disaggregate household load, its programs do help residential customers change their behavior to reduce consumption. Opower programs have shown that energy use can be reduced by 1% to 3%. In behavioral demand response programs, peak demand has been lowered by up to 5%.

Mainstreaming

For its part, Opower has been able to convince dozens of utilities to deploy its solution at scale among millions of end users. The challenge for Bidgely and the disaggregation competitors is this issue of scale. Can they also provide insights and help change user behaviors across a large number of customers? These latest results are promising, and Bidgely has expanded with projects at Texas utility TXU and London Hydro in Canada. As noted in Navigant Research’s report, Home Energy Management, there is growing momentum and consumer awareness around the latest tools for reducing energy use. The trick will be in sustaining this momentum and moving beyond early adopters and into the mainstream.

 

British Gas-AlertMe Deal Signals More Home Energy Consolidation

— March 11, 2015

British Gas’ recent acquisition of AlertMe, a London-based provider of energy and home automation services, signals that home energy management and connected home technologies continue to attract significant investments. Utilities and others are seeking to provide consumers with new tools to more efficiently control energy usage and automate their homes.

The deal brings AlertMe fully under the control of British Gas, a subsidiary of Centrica, the leading energy service company in the United Kingdom. Prior to the acquisition, valued at about $68 million, British Gas was already using AlertMe’s platform. It had also been a strategic investor in AlertMe since 2010, owning about 20% of the company. British Gas leverages AlertMe’s technology for Hive, a service that enables the utility’s customers to control their home’s heating and hot water systems remotely using a smartphone, tablet, or web browser.

AlertMe was attractive to British Gas because its products and data services are used in 500,000 homes. What’s more, the platform is interoperable, able to connect disparate devices like thermostats or door locks made by different manufacturers. And AlertMe supports a range of networking protocols, including Z-Wave, ZigBee, Wi-Fi, and cellular, giving it flexibility.

Still a Crowd

The acquisition has implications in the U.S. market, as well. Home improvement retailer Lowe’s has used AlertMe technology as the underlying software platform for its Iris connected home service since 2012. AlertMe will continue to support Lowe’s and its Iris customers. Also, since British Gas’ parent Centrica owns Direct Energy, one of the largest residential energy retailers in North America, British Gas expects to offer the AlertMe technology and service to those customers as well.

In a wider context, this acquisition by British Gas underscores the increasing importance companies are placing on home energy management and the connected home. France-based utility GDF Suez recently invested $7.2 million in Tendril, a Colorado-based company specializing in cloud-based technology for personalized energy services. GDF Suez intends to use the Tendril technology for customers in Europe. In addition, solar panel manufacturer SunPower has invested in Tendril, committing $20 million to the company and agreeing to license Tendril’s technology. Similarly, Sunnyvale, California startup Bidgely, a firm specializing in energy customer engagement and analytics, has gained traction, winning new deals for its cloud-based technology with Texas-based utility TXU and Illinois-based ComEd.

Nonetheless, the energy management-connected home space is still quite crowded, with big non-utility players such as Google (Nest), AT&T (Digital Life), and Samsung (SmartThings) making plays and a number of smaller energy tech firms, such as EcoFactor, Ceiva, ecobee, and Tado, trying to compete as well. Consolidation is at hand, and we can expect to see similar deals as the market matures.

 

Thermostat Studies Show Benefits of Being Smart

— February 16, 2015

This month Nest announced several studies that have been conducted on its learning thermostat.  One was conducted by MyEnergy, a Nest subsidiary that analyzes residential energy information. The others were conducted by the Energy Trust of Oregon and by Vectren Corporation, an Indiana-based holding company. The results boost Nest’s claims that the thermostat can pay for itself in only a year or 2.

Across the studies, evaluators found average annual reductions in electricity use between 13.9% and 15% for cooling and 10% and 12% for heating loads.  For natural gas, the Vectren study confirmed an average annual reduction of 12.5%.  In terms of cost savings, Nest states that adopters showed an average of 9.6% savings on their gas bill and 17.5% on their electric bill.

Last year, competitors EnergyHub and EcoFactor released third-party studies that indicated reductions in electricity use of 6% to 17% after thermostats controlled by their back-end platform were installed in users’ homes.

The Limits of Studies

Smart thermostats have become increasingly numerous in recent years. According to Navigant Research’s report, Smart Thermostats, North American household penetration of these devices is expected to exceed 20% by 2023. Until recently the market was concentrated in warm weather states, but adoption across colder climates is becoming more common, and utilities are becoming interested in smart thermostats for year-round energy efficiency and demand response (DR) programs.

Regardless, the high prices—$150 to $300 for the device alone—are still a barrier. Hence, smart thermostat vendors have trumpeted third-party studies that indicate positive return on investment (ROI) through energy bill savings. Analyses of products from EcoFactor, EnergyHub, and now Nest indicates annual energy savings in the 8% to 15% range.

But such studies can be interpreted in several ways. The most obvious conclusion is that the chances of incurring similar savings are good given the variety in the studies’ methodology and sample populations. On the other hand, factors like the locations of households, weather varying, and simultaneous energy efficient behaviors all affect study results.

Your Results May Vary

For states where heating and cooling are a small part of the utility bill, the savings from a smart thermostat will look different than those in an area where the costs are high. In such cases the results could be misleading.

The MyEnergy study included households from all over the country in its sample, and Nest claims that it is fairly representative of their adoption base—but is that representative of U.S. consumers as a group? The average reported savings might not fall in the middle of the spectrum of all consumers, so someone using this information as a basis for purchase of the $250 device could be anywhere from greatly or slightly disappointed to slightly or very pleased depending on how similar they are to the majority observed that indicated decent savings.

And if the consumer doesn’t really care enough to break down this information in the first place, much less nitpick findings from a variety of disparate studies? These types of adopters might be drawn to purchase the device simply for its user delight qualities. Nest has created an iconic device that by most accounts works really well and that has a lot of informational features designed to trigger more energy efficient behavior. That would be a great outcome.

 

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