Navigant Research Blog

The Smart Home and the Invisible Hand

— February 7, 2014

So many activities in our lives have shifted from a specific location to any location, and smartphones are largely responsible.  Phones used to be a fixture in a home, now they are an appendage.  Turning on lights, heat, and the stereo used to mean that one had to walk over to that appliance and interact with it.  Now, of course, the line “there’s an app for that” has entered the home, with more and more smart devices being accessible through branded apps.

Apps that can control lights, stereos, door locks, home security cameras, and even individual outlets have been reported on in this blog before.  Together, they embody the emerging Internet of Things.  The biggest play is in energy management for consumers, which makes energy conservation and comfort staging (i.e., the preparation of a home’s temperature, lighting, etc. in time for its inhabitants’ arrival) easy.  Navigant Research’s recent report, Home Energy Management, provides an informed look at trends in this growing market and the challenges it faces.

Enough Already

There are two main challenges.  First is the wild west of wireless communication standards.  From Wi-Fi to ZigBee and Z-Wave, there is no uniform standard or consortia of participants zeroing in on one protocol or pathway.  (This is unlike the automotive industry, which has recently embraced the Android OS for the Open Automotive Alliance by leading car manufacturers, including GM and Honda.)  In the absence of a single or even a consistent set of communication standards, individual appliance makers will have to choose a standard to pursue.

The other challenge is the interface.  Simply put, there are just too many apps.  From the consumer’s perspective, there could be some app fatigue, as users who admittedly embrace these devices have to find each individual app on their phone to control each device.

A few new players have entered the market to address these challenges.  The most notable is Revolv, which has made a physical hub (in an attractive cherry color) that can communicate with seven different wireless signals in 10 different languages.  Accompanying the hub is an app that integrates all of the wireless devices in the home in a single interface.  This makes home automation much easier from the start.  Added features include a proximity indicator that aids in comfort staging and profiles that incorporate a suite of settings for specific occasions (including song choices, lighting, and temperature.)

Now You See It

Other interesting approaches include Insteon, which has essentially set up its own communication standard, and Arrayent, which has created a common platform for the most common communication platforms.  The cable and ISPs have also jumped in the game.  Comcast (Xfinity) and Time Warner are bundling digital home management into triple-play offerings.  It makes sense; they already supply the cable and wireless for the home.

Where is all this home app explosion headed?  First, the consumer demand for smart meters is growing, and a recent Navigant Research survey indicates that consumers view these technologies favorably.  Clearly, the standards must coalesce to make using and installing smart devices easier for the consumer.  The apps will no doubt improve as well, and be corralled in platforms like those provided by pure-play companies, like Arrayent or Revolv, or by Internet/cable/telecom providers.

But the secret sauce may lie in making these devices smarter.  The Nest thermostat purports to learn the patterns of home heating and adjust its settings accordingly.  And with Nest’s owner, Google, purchasing the artificial intelligence and machine-learning firm DeepMind, we can expect those predictions to become more profound, or at least seem that way.  The irony is that the ultimate vision of the smart home lies in making these apps, platforms, standards, and devices all invisible to the consumer.  A truly smart home needs no interface or no manual.  It just performs optimally, according to its users’ current and anticipated needs and behaviors.  So, in the end, for the ultimate smart home, you might say, “There’s no app for that.”


Super Bowl 2012: A Power Play

— January 25, 2012

The New Year is upon us, and President Obama has delivered his State of the Union address, which offered high-level insight on the energy sector in the US but was reminiscent of messages we’ve already heard. Now it’s time to turn our attention to another really important event of the year: the 2012 Super Bowl.  As always, this year’s game will be a staggering display of athleticism and energy consumption (rather than verbiage and applause).  These two things, generally not discussed in the same conversation, offer a more nuanced look at the energy sector here in America.

Every year the stats at the Super Bowl pile up like Tom Brady’s passing yards, including the kilowatt-hours (kWh) consumed.  The 2011 Super Bowl in Dallas, Texas set a record, becoming the most highly viewed television program in American history.  Almost 16 million people tuned in, consuming roughly 11.3 million kWh through television sets alone, according to a report by General Electric.  That’s enough electricity to power all the homes in three NFL cities – Green Bay, Pittsburgh, and Dallas – for 10 hours. 

While many fans are focused on the number of touchdowns or turnovers, they’re generally unaware of the statistics they post in their own homes, through their electricity consumption.  On a wider scale, this lack of awareness plagues the energy efficient home market, the consequence of forces on both the supply and demand side.  Traditionally, consumers’ utility bills have not provided actionable information, making it difficult to interpret their consumption and how to reduce it.  Simultaneously, home builders and renovators haven’t been able to articulate a sensible value proposition for energy-efficiency measures. 

Appliance designs have made considerable gains in energy efficiency, but these gains are eclipsed by the proliferation of consumer electronics, like LCD televisions and digital video recorders (DVRs).  According to the U.S. Energy Information Administration, more than 50 million U.S. homes have more than three TVs, and more than 45 million (40%) homes have a DVR.  The power consumed by appliances and electronics grew from 17% of average home energy use in 1978 to 31% in 2005, according the EIA’s Residential Energy Consumption Survey.  Advances in energy efficiency have historically mattered less to the American consumer than the newest entertainment device. 

There is a chance the American consumer has started to pay attention, however.  Major organizations like the NFL have started highlighting residential energy efficiency – like investing in 800 free home energy audits in the Indianapolis area.  And according to a recent Yahoo Real Estate poll the American homebuyer’s dream home might be more energy efficient and constructed of sustainable materials. 

Currently, there’s little incentive for consumers to tune in to their energy consumption.  Engaging the American public through the most popular entertainment forums (e.g.  the Super Bowl) and by using devices and outlets they already love (e.g.  televisions and social media) may be the ticket to unlocking the energy efficiency potential in the residential sector. 


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