This article first appeared as a featured post on Greenwala.

If you’re unaware or confused by the ‘Smart Grid’, then you’re in good company.  A recent poll from Harris Interactive concluded that consumers have little awareness of smart grid or smart meters.  With billions in stimulus cash and private investment dollars being funneled into improving the intelligence and reliability of our nation’s electrical grid, this is sure to change.  General awareness however, is less important than establishing compelling value propositions for consumers.

I recently attended the Smart Energy Summit in Austin, TX held by Parks Associates.  The conference was devoted to Residential Energy Management and ‘Engaging the Consumer’.  It was an impressive showing of industry leaders in the utility sector, government, and from service providers across the entire smart grid value chain.  I was most interested to learn about the young and mature companies presenting a wide range of devices, software, and packaged solutions to help us better monitor, manage, and reduce our energy consumption.

The average consumer would be surprised to learn how much interest exists to help us save money on our energy bills.  It seems there’s good reason.  According to a 2009 Residential Energy Management Survey conducted by Parks Associates, over 80% of U.S. consumers are interested in learning about how to cut their energy costs.  More telling is our willingness to invest in those savings.  Their recent study revealed that 80-85% of households are willing to pay $80-$100 for cost-saving equipment if they are guaranteed to save 10-30% off their monthly electricity bill.

The jury is still out on whether any of the solutions in the marketplace can achieve this particular value proposition.  Nevertheless, there are a number of interesting offerings that consumers may want to evaluate.

Here’s a list of some of the more exciting companies with residential offerings from the summit that we plan to watch:

	Control4 – offers a complete line of affordable wired and wireless automation products that enable home theater control, multi-room music, smart lighting, temperature control and security Distribution channels:  utilities, consumer retail
	EcoFactor – puts your home HVAC system on ‘auto-pilot’ using a standard two-way communicating thermostat to achieve 20-30% savings on your monthly energy bill Distribution channels:  utilities, energy retailers and home services providers
	iControl – offers a complete broadband home management experience that includes interactive home security, home health care monitoring, and complete home energy management suite that includes monitoring, control, and automation Distribution channels:  home security, broadband, telecom, utilities
	Intamac – provides the core technology behind the D-Link Home Monitoring Starter Kit and its green companion, the Home Energy Monitoring Kit.  The Home Monitoring Kit is a relatively easy and cost-effective way for homeowners and renters to get the security benefits of Internet-connected home monitoring, including mobile alerts.  The Home Energy add-on lets consumers measure the energy consumption of all electrical appliances in the home and offers the ability to program devices to power-down. Distribution channels:  retail (D-Link branded products), utilities, telecom, security, ISPs
	OpenPeak – offers a ‘fourth screen’ for the home by combining the best features of the telephone, TV, PC and cell phone into a compact, easy-to-use tablet giving easy access and control over just about everything relating to communications (phone, contacts, thermostat, Facebook), multimedia (photos, music, video), and information (energy use, news, stocks, weather).  Think of this as a giant iPhone or an iPad, with apps to control everything and anything. Distribution channels: service providers, utilities, applications developers, and content owners
	OPOWER – an energy efficiency software company with a new standard for utility bills: the Home Energy Reporting program triggers energy-saving actions in up to 80% of targeted households. Distribution channels: utilities
	People Power – developing tools that empower you to control your energy consumption (at the appliance level) Join the “Unplug for Earth Day” Facebook campaign Distribution channels: TBD

When I wrote that you would be surprised by the “interest”, I wasn’t kidding.  The number of companies competing in the home energy management category alone is much longer than the list above.  In addition to some of the world’s largest technology companies set on claiming their territory in the smart grid space (Microsoft, Google, etc.) there are a number of lesser known names we can expect to see in the home includingTendril, Energy Hub, Agilewaves, The Energy Detective (TED), EcoDog, Blue Line Innovations, Powerhouse Dynamics, AlertMe, Green Energy Options, Onzo, Poco Labs,uControl , Xanboo, 4Home,…  I could go on.  Again, this is just the in-home category of companies.

Why such a long list?

For sure, the market is big.  With over 3200 utilities in the U.S. and approximately 140 million homes, there’s bound to be competition.  However, there are a few additional factors that accentuate the opportunity and point to the crowded house.

1. Smart meters are not required to deliver a home energy management solution.  While most of the solutions available can work in conjunction with a smart meter, and provide additional capabilities and benefits to the partnering utility, most can work independently of an actual ‘smart meter’.  Smart meters wirelessly transmit real-time energy consumption data.  With smart meter deployment projections assessed at less than 50% of U.S. homes over the next five years, there’s room for utility and non-utility based offerings.
2. Even if your utility has installed a smart meter for your home, there’s a good chance you will not get access to your real-time consumption data anytime soon.  In fact, in their survey of utilities deploying smart meters, Parks Associates assessed that less than 10% of the smart meters deployed over the next several years will be communicating real-time consumption data to the customer.
3. Many of these companies originated years ago with tangential offerings, and are now extending their technologies to home energy management.  Years before everyone was talking about smart grids, the buzz was home automation and remote monitoring and control.  Remember all those anecdotes about being able to adjust the temperature in your home on the way home from work, or being able to adjust the all the lights in house from a central touch-screen display?  Today those technologies are more mature, and they’re better equipped to operate with the help other services currently found in many homes.  These services include broadband cable, Wi-Fi, and even security systems.

So what is it that all these companies are offering?

Generally speaking, all this equipment delivers valuable information regarding your electrical energy consumption.  In its simplest form, this includes how much electricity you’re currently using and how much it’s costing you.  You can expect to find graphical representations of your usage that are simple, attractive, and easy to understand.  Depending on the solution, you can easily spot the biggest energy consuming devices/appliances in your home, and even have the ability to remotely control their on/off status from a central device or mobile phone.

To be sure, these firms are not delivering smart meters.  However, most all of these providers require some means of collecting real-time electrical consumption data that smart meters can deliver.  If your utility has provided you with a smart meter, they may also offer one or more monitoring solutions.  Tendril, for example, is a notable player in utility-based offerings.  Here, the utility provides the smart meter and partners with the likes of a Tendril to provide the in-home monitoring displays/devices.  If you do not have a smart meter, a number of solutions including The Energy Detective (TED), Black & Decker’s Blue Line PowerCost Monitor, and PowerHouse Dynamics’s eMonitor offer work-around solutions that can provide you with the same real-time energy consumption information.

What are we supposed to do with this “valuable” information?

In theory, the more knowledgeable we are about our consumption, the more likely we are to take greater control of our energy usage.  Visually seeing how our energy bill will increase when we turn on the entertainment center or turn off the bedroom lights can have a powerful effect on our behavior.

Approximately 30% of our energy usage is widely considered to be wasteful.  As the adage goes, if we must measure that which we care to manage, then an energy monitoring system is a critical tool in eliminating some of that wasteful consumption.

This leaves at least two important questions to ask:

1. How effectively can we meet our desired cost/benefit value proposition goals?
2. How long can we expect to maintain our new conservative lifestyle behavior?

While it’s early in the game, there is broad concern and focus on establishing a clear and compelling value proposition for the consumer.  There is certainly evidence of people putting their real-time consumption knowledge to good use, but the costs and savings have been questionable.  There is also evidence of customers reverting back to their old ways after the thrill of staring at an energy monitor wears off.  It’s even been argued that there may be a disincentive for customers to conserve energy if they see that the changes in their consumption habits do not translate into meaningful savings. (SeeNPR’s Debate: Do Smart Meters Curb Energy Use?)

Approaches to Establishing a Compelling Value Proposition

The wide variety of solutions coming online this year suggest that there is hope for establishing a compelling value proposition for home energy management, and the smart grid itself.  To that end, I think the best approaches will employ one or more of the following features

1. Integrated solutions – If dedicated home energy management solutions do not consistently lead to meaningful savings, or fall short on the cost/benefit scale, then integrated solutions are well positioned to make up for those shortfalls.  D-Links’s Home Monitoring Kit for example, is a component based offering that allows you to add on energy management capabilities to already affordable home security monitoring.  Similarly, Control4 and iControl give you the capability to view and control more than just your energy consumption.
2. Automated solutions – In Moving Beyond an Energy Conservation Mindset, I talked about the evolution of energy conservation behavior and how technology has the potential to replace the mindset we’re having to adopt to conserve energy.  Automated solutions that manage lighting, temperature, and appliances in the most energy efficient manner (without sacrificing comfort) is what we’re really after.  EcoFactor is a great example of company using the “set it and forget it” principle with HVAC systems, which can account for 50% of a typical energy bill.  Their sophisticated energy management software which took Grand Prize at the recent Cleantech Open collects, stores, and processes 24,000 points of data each day from individual homes, local weather stations and numerous other geographic inputs to create individualized HVAC Auto-Pilot programs that can easily save homeowners 20 to 30 percent in HVAC energy usage without sacrificing comfort or convenience.
3. Behavioral science/social psychology based solutions – Most people at one point or another are guilty of “Keeping up with the Joneses”.  While this catchphrase typically has negative connotations, the same psychological triggers that lead us to conspicuous consumption can be put to good use.  One of the more shining examples of companies employing behavioral science techniques to promote energy efficiency is OPOWER.  Instead of providing a home energy management solution, they’re working with utilities to re-engineer the utility bills that we receive in the mail.  The results are unprecedented and nothing short of impressive.  Participation rates in most energy-efficiency programs are typically less than 5%. By contrast, OPOWER’s flagship Home Energy Reporting program triggers energy-saving actions in up to 80% of the targeted households.

It’s a long and winding road.

There will be no shortage of interesting news and stories to report in the weeks, months, and years ahead.  We’ll delve deeper into the value proposition approaches mentioned above, and some of the companies using them.  We’ll follow the progress of the various solutions coming to market in 2010.  We’ll also explore some of the more hidden issues with smart meter data.  If you have stories to share, we’d love to hear from you.  Our new site will be open next month, and you can email us in the meantime at info@smartgridcitizen.com .  You can also follow us on Twitter @plugingetsmart.

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