The Future of Energy, Part II: Smart Home Technology
This is the second in a three-part series on what Shelton Group’s most recent Energy Pulse data predicts for the future of energy. This series explores consumer demand for renewable energy and smart home technologies as well as shifting transportation infrastructure.
In the first post in this series, I wrote about America’s desire for renewable energy and the increasing appetite for solar PV and other distributed electricity generation systems. This piece explores the likely impact of smart home technology adoption.
Smart home technology adoption is exploding
Adoption of smart thermostats and other connected home devices will have a huge impact on residential electricity consumption and customer/utility relationships in the future.
According to energystar.gov, “If everyone used an ENERGY STAR certified smart thermostat, savings would grow to 56 trillion BTUs of energy and $740 million dollars per year, offsetting 13 billion pounds of annual greenhouse gas emissions.”
In our most recent Energy Pulse study, 11% of Americans said they own a smart thermostat “that learns your temperature preferences and knows when you’re not home, adjusting settings to save energy.” Another 32% said they’re likely to own one within the next year.
Six percent said they own a connected home system that allows them to control their thermostat, lighting and/or appliances with a phone app. And 31% said they plan to own such a system within the next year.
What’s fueling the desire?
We think it’s less about the energy savings impact and more about the smart home “sizzle” and convenience. While many of these smart thermostats have been sold à la carte, more and more are being sold as part of a smart home service package.
For example, BI Intelligence estimates that Comcast’s XFINITY home service has 1.79 million subscribers, all paying $40 per month for home security and home automation services, including a smart thermostat (Nest or Zen), home security monitoring equipment, plus a tablet and a mobile app to conveniently control the connected systems.
Comcast recently rolled out their xFi Advanced gateway router to facilitate the control of additional smart home technologies. Now customers can potentially add other DIY applications to their smart home hub, like off-the-shelf lighting control packages.
Other major players/services include Cox Homelife, CenturyLink Smart Home, AT&T Digital Life, Time Warner Intelligent Home and Verizon Home Monitoring and Control.
Smart speakers are also driving market adoption as much as, if not more than, the specific desire for smart thermostats. A January study by Edison Research and NPR reports that 16% of U.S. households have a smart speaker, with the vast majority (69%) owning the Amazon Echo Plus, which allows for plug-and-play functionality with many smart light, lock and wall plug manufacturers’ products. Buyers also get the “sexy” functionality of cloud-based voice control via Alexa.
Other smart speaker/connected home options are available from major players like Google Home (estimated to own 25% of the U.S. smart speaker market) and Apple HomePod.
Millennials and Gen X are leading the charge for smart home technologies. Millennials are significantly more likely to have installed a smart thermostat or a home energy monitoring device or display. And Gen X is the age cohort most likely to report that they had purchased a “connected home system that lets them control their thermostat, lighting and/or appliances from their phone.”
As more and more Millennials purchase homes and replace old appliances, they will have an even bigger impact. Shelton’s Eco Pulse 2015 study asked near-term homebuyers (primarily Millennials) to choose the features they expect their next home to have. Among the top responses:
- A smart thermostat that learns my preferences and knows when I’m home and automatically adjusts (36%)
- Smart (connected to a mobile app) appliances (32%)
- A home automation platform with an app for controlling the smart thermostat, lighting, blinds and security system from my phone (24%)
What this means for utilities
Non-utility home service providers are supplying technologies that are helping to drive down base load and disrupting the traditional utility/customer relationship. The irony? A large percentage of residential customers would prefer to get many of these services from their utilities – even, in some cases, preferring a utility-branded “white label” smart thermostat over other big-name brands. But utilities have been slow to act, either because of regulatory limitations and/or analysis paralysis. And we’re afraid that (in the Southern vernacular) “that horse is leaving the barn.”
Don’t miss the final piece in this series – next time, I’ll be discussing the future of transportation.