One of the things that we looked at during our discussions with the utilities in California was the HAN ROI to the homeowner, which had to be extremely short based on the costs savings per year.
The HAN Return On Investment (ROI) would require low cost devices that required little to no support or installation. A ZigBee or OpenRF based device that includes measuring power usage plus ON/OFF capability (for scheduled ON/OFF) needs to be priced for the markets it is intended. A more sophisticated device which determines load signature would, for the time being, cost more but not much. Prices, and therefore the ROI, that are most often quoted are designed for B2B which takes into account the large amount of money the commercial sectors are willing to pay for technology or whatever the market would bear. When dealing with HAN markets, the dynamics are different. Two markets exist — the consumer markets and the utilities/conservation service companies. Pricing would evolve around expected costs associated with those markets.
Within the utilities/conservation service markets, the main approach so far has been to link to an in-home display or to a communicable thermostat. The trend in consumer markets, however, is focused towards energy efficient and energy smart appliances as depicted by GE. GE’s approach basically meters each appliance but does so by moving the monitoring circuit internal to the product. A cheaper alternative would be to meter every plug. While GE’s initiative is futuristic, one can monitor appliance now using inexpensive plug-ins. Instead of calling it a Smart Appliance, as GE does, we can easily say it is being “smart socket.” With consumers demanding more involvement in energy management, but unwilling to pay for such involvement, it is foreseeable that smart sockets will become default in new homes. Particularly if the price per unit is low enough that it can be enveloped into the price of the home much like security systems are now included in most new homes. Since we are not just talking about the USA market but globally, the idea of monitoring appliances via smart sockets is becoming increasingly more attainable. HEMS looked at factors that influence home automation and particularly the energy reduction-demand response side of the equation and concluded that we are on the right track as to our product offering.
Utilities are cautiously looking at load curtailment and reduction through home systems — they are just not saying it publically. Note that Google’s and Microsofts efforts seem to strike a positive note with utilities. Our dialogue with utilities, particularly in California, tells us that utilities are interested in HAN and that metering individual appliances is a strong consideration (see Pacific Northwest National Laboratory’s recent studies and the use of in home displays and PCTs in various other studies). They just don’t see themselves as the owners/custodians of such systems.
There is no study that covers integrated HAN systems for energy reduction (DR or DSM) or the monitoring of individual appliances other than those being pushed by the home control companies, appliance manufacturers, Google, Microsoft, and the recent crop of HAN solutions manufacturers. To grasp the significance of appliance level monitoring one really needs to be looking at the home control, home security, home networks, and home media industry trends. The utility industry is moving towards HAN technologies to include appliance monitoring but because of the much hype surrounding smart grid, these type developments become background noise no one focuses on. That’s not to say that monitoring appliances is not a market nor that it has no future — on contrary, turfs are being carved out now with appliance monitoring as the center with GE, Silver Springs, and Google putting their fingers into the pie and now Microsoft There is so much misinformation (speculative expert comments) on smart grid and smart meters that developments such as these are not that noticeable.
To be honest, we don’t see HAN technologies as being a luxury item that only the few would purchase — instead, we think HAN technologies will only become more dominant as utilities and the public at large realize that reducing usage isn’t as easy as turning off a light switch. Energy consumers in developed countries habitually use electricity when there isn’t a mechanism to effectively alter that lifestyle.
When we did our market research, we had to review tons of data from various industries within the home appliance and home network industries since the utility industry had not even considered HAN and energy conservation/carbon footprint were vague terms. Now every meter manufacturer has a HAN department that is aggressively looking at where the HAN movement is leading them. What would happen if metering and monitoring moves outside the external meter? It is the meter manufacturers that need to be on top of this to stay competitive.
The HAN market is more of a consumer appliance market than a utility market though the utilities do benefit from the implementation of such home solutions. There is also the consideration of the energy management service companies that are considering or already moving into residential markets. Right now energy management systems or EMS is a commercial enterprise with large companies producing costly systems for building monitoring and control. Many are looking at ZigBee as a low cost alternative to market to home owners. Only time will tell if their market research or gut hunches are correct.