Over the last year or so, Salt Lake City-based Control4 has been testing ways to use its home entertainment and security automation system to monitor and control energy use in the home.
On Wednesday, it announced it has raised $17.3 million to bring an energy-specific platform to market, adding its name to the host of startups and established companies alike seeking to make money by making homes more energy-conscious.
Control4's "Energy Controller" – a wirelessly controllable thermostat linked to a gateway device meant to communicate with smart meters – is set to hit the market by early next year at a price of less than $200, said Glen Mella, president and chief operating officer.
That's cheaper than the $500-and-up starting point for a broader Control4 home automation system, which links TVs, stereos, lighting, thermostats and security systems via the ZigBee wireless protocol into a remotely controllable interface.
That lower price point will be critical for broader adoption by both utilities pushing energy management into customers homes and homeowners looking to get more energy efficient on their own, according to observers of the emerging "home area network" field (see The Smart Home, Part I).
A host of startups – Tendril, Greenbox, EnergyHub, 4Home, AlertMe, eMeter and many others – have hardware or software aimed at giving homeowners a view into, and in some cases control over, their energy use (see articles here and here).
And heavyweights like Google and Microsoft are coming out with their own web-based home energy management platforms (see Microsoft Launches Home Energy Site, Sees Devices, Demand Management in Future and Lu's Google PowerMeter Update: Open APIs, More Partners Soon).
Most of these contenders are looking to utilities to provide an entry into homes. Not only do utilities hold the energy data that promises to make such systems most useful, they're also expected to help cover part of the costs of installing them.
Control4 is looking at the utility route as well. It has been testing its systems' energy management capabilities with Xcel Energy's SmartGridCity project, with enabled homes now taking utility commands to cut lights and air conditioners during peak demand times, and is in pilots with other undisclosed utilities, Mella said.
At the same time, Control4's systems are sold direct to homeowners through a network of about 1,200 resellers. The company has nearly a million devices installed in about 50,000 or 60,000 homes in three dozen countries around the world, Mella estimated.
Selling directly to homeowners is seen as an attractive option for many startups funded by venture capital firms impatient with utilities' slow and regulator-constrained decision making processes (see Will Utilities or Customers Lead in Smart Grid?).
The presence of Best Buy in Control4's latest funding round could be an indicator of a more direct-to-customer market channel. Best Buy Capital, the electronics retailer's investment arm, is among the new investors in Control4. The others are Mercato Partners and University of Utah-linked University Venture Fund.
Existing investors Frazier Technology Ventures, Thomas Weisel Venture Partners and vSpring Capital also joined in the round, which brought the total investment in Control4 to date to more than $50 million, Mella said.
Best Buy is now selling Control4 systems in stores in the Atlanta, Chicago and Raleigh, N.C. areas. Mella wouldn't say if Tuesday's investment would be followed by an expanded presence in Best Buy stores.
Whether homeowners will be willing to pay $200 to control their energy use remains an open question. Mella pointed out that utilities are expected to give homeowners incentives of some kind to help cover part of the cost of such systems.
But some observers question the idea that homeowners will make up a significant market for such products, given that wireless home automation systems have traditionally been niche products for the wealthiest homeowners.
Control4 does have an important ability that some other platforms – including those from Google and Microsoft, at least for the time being – lack. Control4 has the ability to actually control devices like thermostats and lights, rather than simply watch how much power they're using, Mella said.
While studies have shown that just knowing what their power usage is homeowners can change behaviors in a way that can shave 10 percent or so from their energy bills, "Our view is that, information sharing is just the half of the opportunity," Mella said.
Remote control can be particularly important if home energy management systems are to be linked with utilities that want to turn down air conditioners and appliances to curb power use during peak demand times.
This ability, called demand response, is one of the earliest areas in which utilities are pressed to save energy, given the high prices they pay for power at peak demand times, not to mention the threat of blackouts that peak demand times present (see The Elusive Smart Meter-Demand Response Combo).
Control4 systems are designed to operate with two-way communicating "smart meters" that use ZigBee to send and receive data into homes, Mella said. That's most of the smart meters being deployed in North America today (see RF Mesh, ZigBee Top North American Utilities' Smart Meter Wish Lists).
But the company is also looking at other ways to connect homeowner and utility, including existing broadband connections (see A Broadband Smart Grid?).
"For a significant period of time, we're going to live in a heterogeneous environment where you have a mix of old technologies and new technologies," he said.