Energizing The Connected Home

on June 08, 2015 at 2:00 PM

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The term Internet of Things (IoT) was first coined over 15 years ago to describe the trend of connecting physical objects to the digital world. Today the concept is more relevant than ever as consumers’ use of connected devices from smartphones to fitness trackers and thermostats shape the way we live and work. And our use of these devices is transforming our expectations of how we engage with businesses and consume services.

A recent study from Accenture shows that consumers find intelligent devices increasingly relevant to their lives and are inspired by the possibilities of the connected world. Yet to gain the consumer confidence that will move connected-devices and services from early adoption to mainstream use, companies need to ensure a great, convenient customer experience and security and privacy that will build consumer trust.

This is equally true when it comes to the connected home and enabling greater residential energy management. Just as businesses across industries – from retail to banking – are changing the way they engage with their customers, utilities must evolve to remain relevant in this digital revolution and drive the connected home movement forward.

The Evolving Utility/Consumer Relationship

Among the many issues facing utilities today – grid reliability, aging infrastructure, cost recovery, implementing energy efficiency and demand management programs – the most disruptive force of all may well be the consumer. Meeting consumer expectations, achieving consumer acceptance and satisfaction and engaging the consumer in two-way communications are all issues utilities are facing, many for the first time. In addition, the way consumers interact with the grid is changing as they adopt new, renewable energy sources and technology, such as solar generation and electric vehicles. Utilities are quickly realizing the impact residential consumers have on the grid and are quickly realizing they need to effectively engage consumers in energy management.

Ironically, both utilities and consumers have similar wants and needs. Similar to the utility, consumers want grid reliability and access to information to better manage and control their energy.

Smart Meters and the Smart Home

Smart meters underlie the concept of the connected home by enabling two-way communication between the utility and their customer. To date utilities have installed 50 million smart meters in homes across the U.S., reaching over 43 percent of homes overall. The meters can give consumers the real-time information they need to see how much power they’re using in their homes, thus empowering them to change their habits and cut their bills.

Yet many mainstream consumers are still wary of smart meters. They don’t fully understand what they are, how they work, and why they should want them – the old meters seem to work just fine. They raise many valid concerns – will smart meters result in higher bills for homeowners? Will they present new security risks? What is in this for me?

Utilities must engage with their customers to address these concerns and demonstrate how the information smart meters provide can make homeowners lives more comfortable and convenient. Additionally, utilities must be transparent about how customer data is collected and stored, and the safety measures in place to keep customer data safe.

However, it’s evident that smart meters alone won’t change consumer behavior. Despite the number of smart meters already installed, the connected home will not reached its full potential with mainstream consumers without a little help.

Even residential customers with smart meters and access to information in real-time aren’t seeing their electricity usage in a language that is readily understandable to them. Smart meters tally up electricity use in kilowatt-hours, so until the monthly bill comes, many homeowners don’t know how that translates into dollars and cents.  It is hard to take action after the fact. And in many cases where the data is available to consumers before the end of the month, it isn’t intuitive to know how to turn it into actionable information.

Utilities need to find a way to make it easier for consumers and motivate them through compelling user interfaces that relay information from the meter in near real time, and translate it into dollars and cents, and actions that make a difference.

Making the Smart Home a Reality

The real key to broad acceptance and adoption of energy efficiency programs is simplicity. Simplicity begins with how the energy management message is communicated so it’s relevant and understood. While terms like smart grid, smart meters, and demand response may not resonate with the majority of consumers, what does resonate is connectivity, convenience, smartphone technology and mobile communication. Many consumers don’t know they need an energy management solution, but they are likely to respond to having more control and choice. None of us knew we needed Post-It notes or smart phones either, and now we can hardly live without them. Consumers already see the benefits of being empowered in areas ranging from travel to banking. Communicating the empowerment that comes with being in control of their home’s energy usage is a message that resonates and matters to them.

When given timely, consistent and easy access to their energy usage via already familiar platforms, such as mobile apps or tablets, consumers are more likely to be engaged and compelled to modify energy usage behavior. The added convenience of being able to use an app to remotely monitor and manage their home is another motivating force.

Through open communication, utilities can show customers the benefits of smart meter technology and other smart home devices. The result will be more reliable, cost-efficient energy along with exciting new solutions and services for homeowners to manage their energy more efficiently and conveniently.

It is an exciting time for the connected home market as a recent study shows that connected-home device sales will drive over $61 billion in revenue this year and connected-home device shipments will grow at a compound annual rate of 67% over the next five years. We have reached a tipping point and utilities are poised to play a critical role in making widespread adoption of smart homes a reality.

Jenny Roehm is Senior Manager of Utility Residential Solutions at Schneider Electric.