Home energy management in 2012, like every other year, finds us somewhere between the Flintstones and the Jetsons. There are nationwide television commercials that show a mom remotely turning on kitchen lights for her child using her smart phone. Two-way smart thermostats that can be controlled via the internet fly off store shelves. But dishwashers and refrigerators are hardly communicating with a utility to turn themselves on when energy is cheapest. 

Progress is slow and steady in the home energy management and connected home industry. But mostly slow. Companies with solid analytics that can offer immediate savings to utilities without having to spend too much saw progress in 2012. But the notion of a home area network still seems like the Jetsons. The internet of things just hasn’t quite made it to the average home.


Americans Still Clueless

Before we get to some of the feel-good trends of this year, let’s start with the harsh reality. People still have pretty much no idea what drives energy use in their homes.

The most important question is, whose fault is that?

There’s plenty of blame to go around: apathetic Americans who pay relatively low prices for electricity; utilities that are unable to become the trusted advisor Americans need on energy use; and then there’s the ever-increasing onslaught of gadgets that offset the strides made in efficiency standards.

At least every six months, Greentech Media and other news outlets report on these sad statistics that barely budge. And while people like to complain about heating and cooling bills, one recent study found that bills would have to go up at least $10 per month before a homeowner is willing to shell out for energy-efficiency retrofits.

As utilities choose, or are mandated, to offer more energy portals and reports that educate the average consumer, this could start to shift in coming years. But we’re not there yet. Not even close.



Everyone Gets In the Game

Last year, we closed out 2011 by mentioning the entrance of big-box stores after big software firms exited the home energy management space.

The news about big-box stores making plays in the energy space increased, but so did press releases claiming that everyone else is getting into the game, including security firms, cable providers and equipment makers, like Ingersoll Rand.

A few years ago, insiders questioned whether the utilities might just be left holding the wires while other companies owned the relationship with a customer inside of the home. That could happen, but many utilities have expressed interest in handing off that relationship.

It’s already being tested in some places, like San Diego Gas & Electric, which is leveraging thermostats in their territory on Alarm.com or EnergyHub’s platform for a peak time rebate program. Earth Networks (owner of WeatherBug) is also working with CenterPoint in Texas in a similar program.

The appeal for big-box stores is the synergy of buying a GE refrigerator and a Nucleus home energy manager all at the same time, as Sears wants to do. There are also different approaches. Lowe’s has its own platform for a connected home, Iris, while Best Buy has concept stores in three large cities to test the waters on connected home offerings. Home Depot is working with Opower to offer tailored coupons.

Comcast announced it was picking up EcoFactor to roll into its Xfinity home offering, although it won’t be available to customers until 2013. Verizon also announced connected home services late last year.  

The competition to make the connected home a reality should continue in 2013, with more software startups snagging deals with the big guys. But the Consumer Electronics Show has been promising the home of the future for decades.

Utilities will start pilots to integrate their energy efficiency and demand response programs with third parties, especially as smart meters are deployed and turned on. Big-box stores and telco providers have the huge ad budgets that could help to sell connected home services -- of which energy will play one part -- in a way that was never possible when just the utilities were in the game.


Becoming Hardware Agnostic

As the in-home display goes the way of the dodo in the U.S., companies are downplaying or completely shutting down hardware divisions and leaving the rest to established players.

Tendril is the starkest example. The company, which once noted that the big savings really come with controlling the thermostat, is now an open platform for everyone from BMW to Whirlpool to build apps with. EnergyHub is also downplaying its hardware offering as it works with big name thermostat maker Radio Thermostat of America. Onzo also sold off its hardware division to focus on analytics.

Not everyone is tossing the hardware out the window. Nest, the sexiest thermostat in the world (competition wasn’t stiff in that category), is all about its sleek design coupled with advanced analytics. Energate is another home energy startup that still has hardware at the core of its offering, which has been expanded to include broadband connections.

Of course, the biggest savings come from controlling the stuff that uses the energy -- whether that’s a hot water heater, an HVAC system or a refrigerator. But for now, the appetite in the market is low-cost analytics that utilities can deploy, and hardware is largely being left to legacy players… and Nest (if it can scale at the speed it wants to next year).


Tapping Big Data

Some would argue that taking various electricity readings from a home is hardly big data. And by itself, it isn’t.

Opower, however, is taking in 90 billion meter reads annually from the more than 75 utilities it works with. In 2012, Opower released Opower 4, which is based on Cloudera’s Hadoop infrastructure, and supports Opower’s core competency of delivering behavioral feedback to energy customers to help them be more efficient. Oracle also purchased DataRaker, a cloud-based data analytics company that works primarily with smart meter data. 

At The Soft Grid conference in San Francisco, Jim Walker from Hortonworks talked about how his company’s focus on accelerating Hadoop for enterprise solutions could help with consumer-focused energy, such as charging networks for electric vehicles.

As utilities turn on the full functionality of their meters, which can often collect data every 15 minutes, there is also the need for analytics that can take that information and turn it into something useful for the consumer, whether it’s finding a better rate plan for the customer (if there’s ever different rate plans to pick from) or presenting real-time outage information during a large storm.

As Jeff St. John noted in an article about IBM’s big data work with Oncor, “Big data -- the smart grid delivers it, utilities are awash in it, and somebody’s got to step in to collect it, analyze it and start delivering real-world value from it.”

Expect some household names, like IBM and Cisco, to have end-to-end solutions that touch the consumer. But startups are also making the investment to handle unstructured data to move from niche players to enterprise solutions for the utilities -- and everyone else looking for a piece of the consumer energy pie.


Green Button Grows

In utility circles, the Green Button was the belle of the ball in 2012. Large utilities flocked to endorse it; companies eagerly nodded in support as well.

But go ahead and ask your average neighbor if they’re using the Green Button, and you will likely get blank stares. The reality is that it’s been a good start, with lots of industry support, but most of that support has not yet turned into action. More people are probably using the Easy Button from Staples.

By May 2012, the Green Button, which offers utility data in a standardized format, had been adopted by utilities that serve more than 30 million customers. Soon it will be available so that consumers can automatically share data with third parties, if they choose to.

The initial uptake is laudable, but there’s still so much more work that needs to be done, according to a study from IEE, an institute of the Edison Foundation focused on innovation, electricity and efficiency.

Of the 33 utilities that have committed to providing energy data in that format, only seven have implemented it so far. In 2013, it will likely be the small and medium commercial customers that gain the most insight from working with third parties that can take the data in this format and turn it into something useful.

More utilities will also likely come on board in 2013. But it won’t be commitments that matter as much as activation and clearinghouses where consumers can easily try out third-party applications.


Residential DR Gets Real

Two years ago, we questioned whether residential demand response was mirage or reality. Of course, old school demand response, where utilities turn off air conditioners, had been around decades.

But newfangled demand response programs that involve different price tiers -- whether carrot or stick -- are being offered to consumers in increasing numbers. Baltimore Gas & Electric has had an opt-in demand response program for years, but it will now offer a rebate program to all customers beginning next summer. San Diego Gas & Electric also offers a rebate program for customers turning down their thermostats during the hottest days.

At Oklahoma Gas & Electric, there is a plan to involve at least 100,000 homes in its demand response program, which will help delay new generation until at least 2020. ConEdison is working to curb watts from window air conditioners, which are prevalent in New York City.

The secret to success in residential demand response is scale and segmentation. Homes don’t have the energy usage of large buildings, but taken together, they still represent a significant portion of peak demand for most utilities.

The other issue is segmentation. Some houses are just better candidates for demand response: either they are more flexible with their energy usage or use more overall and therefore there are more ways to cut energy use.

Of course, utilities also need enough information about their customers’ usage to be able to suggest if they might benefit from a demand response program by saving money. Even if the entire customer base is being targeted, some utilities have found that it’s important to understand customer segments for better uptake of new demand response services.

For analytics companies in the industry, that level of customer insight is becoming a more important selling point -- especially for utilities like OG&E, which aren’t just playing around with different pricing models for fun, but have genuine targets for peak reduction.

Peak time rebates are still in their infancy, but they will only grow in coming years. Think of it as time-based pricing with training wheels.