Despite having technology in 150 million homes, Honeywell (NYSE: HON) is often left out of the conversation about next-generation residential energy management offerings.

Maybe it’s because Honeywell is already a global giant. As one of the market leaders in home thermostats, Honeywell has more than 1 million load control devices in the U.S. as part of old-school demand response programs. More than 600,000 of those are one-way communicating thermostats. It’s not a startup that needs to tout every utility contract, when it already has hundreds of them.

The automation and controls company wants to keep up, however. Bigwigs from other sectors, like Comcast, are also in the home thermostat game. And then there are startups like Nest, which Honeywell sued last year.  

To keep the offerings fresh, Honeywell launched a new thermostat this week, Total Connect Comfort with ADR. The two-way Wi-Fi thermostat runs on the Akuacom's Open Automated Demand Response (OpenADR) platform, the same demand response platform that Honeywell uses for its commercial demand response program. Utilities can now run their entire demand response offerings from a single OpenADR-compliant platform. By leveraging OpenADR, utilities can get real-time confirmation of load shed during demand response events.

“We see a number of opportunities,” said Jeremy Eaton, vice president of Honeywell Smart Grid Solutions.

The first opportunity was a more formal integration with partner Opower announced earlier this year. Opower and Honeywell teamed up to offer energy-efficiency behavioral feedback along with a two-way thermostat that can support utility demand response programs. The platform can also be run without smart meters. But “there’s also a big part of the market that just wants better demand response,” and not an energy efficiency program as well, said Eaton.

The OpenADR protocol also allows end-users to participate in different program designs. While the communication specification has mostly been used in the C&I market, there is certainly an opportunity in the future for economic demand response for homes.

South Sioux City, Nebraska will be the first community to deploy the new thermostat. The municipal utility is looking to shed about 3.5 megawatts of residential load in each demand response event from about 3,500 customers, which will receive the new Honeywell thermostat for free.

Some utilities are seeing even better reduction per household than the industry standard of 1 kilowatt per home. Oklahoma Gas & Electric is getting nearly 2 kilowatts per home with its latest demand response program.

The South Sioux City utility is looking to hedge against demand charges, which can make up more than half of a customer’s bill in summer months. Honeywell is well positioned to be the provider to the thousands of municipal and cooperative utilities.

Honeywell also works with many municipalities on energy issues. In South Sioux City, the thermostat program is part of a $5.4 million infrastructure improvement project with Honeywell that also included a Wi-Fi infrastructure and advanced metering infrastructure.

Honeywell says it is ready to compete on every front. Its partnership with Opower provides a solution for utilities without advanced metering. Honeywell boasts about a 40 percent market share as a thermostat manufacturer, making it a contender for any utility demand response contender that wants to leverage already-existing thermostats in its territory, as San Diego Gas & Electric is doing with Alarm.com.

The global giant is also well positioned because many of the startups do not actually make their own hardware, or have gotten out of the hardware game in recent years. From EcoFactor to Tendril to Opower, the sophisticated software startups need an actual device to connect with (usually a thermostat) to drive greater energy savings.

Eaton also hinted that the latest thermostat was just the first of much more to come in this market in 2013 for Honeywell. “We’re incredibly excited about this space,” he said. “We expect to be a leader.”

Tags: demand response, energy management, honeywell, openadr, peak reduction, residential demand response, summer peak