That is the average duration between the time when a consumer gets a smart thermostat for controlling energy use in their home to the time when they begin almost completely to disregard it, according to Recurve co-founder Matt Golden. While the thermostats work and reduce energy consumption, active interest tends to drop off quickly.
Recurve’s data point -- which the company obtained as part of an effort to better understand home energy habits -- was an early signal in 2010 that home area networking or HAN was going to be tougher than expected. Back in 2004 and 2005, many companies claimed consumers would cut their bills by 5 percent to 15 percent if presented with timely, accurate data from LCD screens or other devices and ways to control their appliances.
The figure turned out to be ambitious. Last May, Accenture unfurled a study that said consumers spend only six minutes a year studying their utility bill.
Meanwhile, vendors like Silver Spring Networks and Tendril began to phase out or minimize HAN hardware (like in-home screens) in favor of smart phones to cut costs. VCs like Vinod Khosla began to say that home networking would become redundant with the advent of super-efficient appliances. Microsoft this year began to shift out of home automation and into commercial buildings.
Concurrently, HAN-less concepts began to gain ground. Opower gets consumers to reduce power consumption by 2 to 3 percent by sending them simple reminders -- no household hardware required.
“This is how 90 percent of us will experience the smart grid,” Ogi Kavazovic, vice president of marketing and strategy told us back in February. “The 2 percent to 3 percent is without smart meters.”
Dynamic pricing and prepaid bill programs can help, too. Consumers on prepaid programs with the Salt River Project, the Arizona utility, curb their bills by up to 8 percent, according to David Green, executive vice president, customers and markets, of Elster Solutions. Their behavior is adjusted through information but without HAN hardware.
So is HAN dead? Some hardware devices might be, but HAN as a concept isn't. The opportunity is too great. Homes consume approximately 20 percent of all of the energy in the U.S. -- and that energy isn’t generally used efficiently. Khosla is right: new appliances will be far more efficient. But that won’t prevent someone from leaving the light on in the garage. Shifting clothes drying and refrigerator defrosting to off-peak times and turning down heaters will require some form of HAN-like intelligence.
Demand response programs, incredibly popular with regulators and utilities, have only touched a small fraction of the population, and DR is really just HAN as a service. In the same Accenture study, 52 percent of consumers said they’d cede some thermostat control to utilities if it would cut their bills by 20 percent or more.
DR programs have another huge, inherent advantage: utilities pay for the hardware. Deregulation -- separating power production from retailing -- will also bring service expertise and customer demographics to power delivery. Simply put, a retailer might be more willing to try home automation and DR-like efficiency programs than utilities. Marks & Spencer, the famed London department store, has started to offersolarand efficiency services.
"It's not a matter of whether home energy management technology will fly; it's a matter of what form it will take and how it will be delivered. There's a lot of activity in the sector. A lot of different delivery models and form factors are being tested. Consumer engagement is key. The winners will be the ones that deliver good savings and great user experiences," says Chet Geschickter, Smart Grid Analyst at GTM Research and author of a recent HAN research report.
It’s going to be a subject we debate at The Networked Grid on May 4 in San Francisco. Participants include Adrian Tuck, CEO of Tendril, Eric Dresselhuys of Silver Spring, Greg Guthridge of Accenture and Ogi Kavazovic from Opower.
Hope to see you there.