It was only a matter of time before utilities started leveraging the connected thermostats that already exist within their territories. We certainly weren’t the only ones to think of it, as cable companies and home security companies have said that it seems like an eventual, natural extension of their connected home offerings.

Well, it’s happening.

San Diego Gas & Electric is offering Alarm.com customers who have that company's wireless thermostat an increased credit within the Reduce Your Use program. The peak credit - which SDG&E argues is not a rebate - is all carrot and no stick, giving customers cash back on their bill when they cut back on electricity use on critical peak days. The pilot has been going for about a month and will run through the end of this year. EnergyHub customers are also available for the higher rates with SDG&E. Earlier this year, CenterPoint teamed up with WeatherBug to offer its home energy management app to customers that take part in their residential demand response program. 

For customers with Alarm.com’s technology, they will receive $1.25 in credit for every kilowatt-hour saved during each event, compared to $0.75 that other participants receive.

“As far as I know, we’re the first and only security platform that’s integrating in a program like this,” said Alison Slavin, VP of product management for Alarm.com.

There are only about 1,000 Alarm.com customers that have the connected thermostat in SDG&E’s territory, which is home to about 3.4 million customers. The homeowners who are eligible can sign up through Alarm.com’s website and then they can pick two options: to get alerts and then decide if they want to change the thermostat, or let Alarm.com automate the thermostat to respond to events.

Unlike other demand response programs, where the utility sends a signal directly to thermostats, for the Alarm.com customers, the signal and announcement of an event goes to Alarm.com, which then sends out the alerts through their cellular wireless network to connected devices.

If people opt to just get the alerts, they will get the alerts via their tablet, smartphone, email or whatever medium they choose. They can then opt to adjust the thermostat through those devices or on the thermostat itself (how old-fashioned!). Or they can do nothing. EnergyHub has about 20 to 30 percent of customers in the territory signing up for the program, with about two-thirds of those that do sign up choosing the automatic setting. 

The other option is to let Alarm.com adjust the thermostat for the duration of the four- to six-hour event. Like many other companies that offer connected thermostat services, Alarm.com tries to make the most of precooling and historical usage to keep comfort maximized throughout the peak event. As always, there’s an override function.

“When we automatically set the thermostat, the big area where we have a benefit is activity patterns,” said Slavin. Since the core business is security, Alarm.com has historical usage on when families are in and out of the house. The company will also be adding in location-based services, so it can turn lights on or adjust the thermostat when a mom might be ten miles away from home with her kids.

The historical usage patterns mean that Alarm.com can fine-tune each home’s thermostat, with customized precooling, rather than just hiking up every home's temperature to 79 degrees.

The program linking SDG&E and Alarm.com will likely continue for another year, but “the plan is to evaluate the results,” said Slavin.

Anecdotal evidence shows that customers are excited, she said, because this makes it easy for them to get the credit without having to do anything, “but it’s still pretty early.”

It’s early enough that the business model could also change, especially if Alarm.com expands to other utilities. For now, the incentive is that more of the company’s security customers would want to get the added thermostat offering to take advantage of SDG&E’s program, rather than the utility paying Alarm.com to be a part of the program.

Expanded connected home features are increasingly important for Alarm.com, which recently raised $136 million for added services. Those services will include lighting controls, home automation and weather forecasting. And as more services are added in, there are more that could potentially be automated for demand response.

But for now, they have a pilot to get through. “This is all very exploratory,” said Slavin. “But it’s something we’re very excited about.” For EnergyHub, which has signed up four utilities to programs like this, it's still early, but it's here to stay. "It's officially a trend," said Seth Frader-Thompson, CEO at EnergyHub.

Tags: alarm.com, connected home, connected thermostat, demand response, peak rebate, residential energy consumption, san diego gas & electric, sdg&e, wireless thermostat