Honeywell has energy controls in 150 million homes and counting, and while most of those are old, digitally dumb thermostats, its latest models are smart and getting smarter. Why not give them a single, digital cloud-to-ground contact, so to speak, to manage them all as an energy-saving, power-shifting whole?
That’s the plan behind Honeywell’s new “cloud-to-ground” service. In the next few months, Honeywell will start mass-producing new thermostats built to connect wirelessly to broadband connections in the home, and thence to its cloud-based network, originally built for its home security business. Only now, the cloud will also be running energy applications, developed both in-house and by partners like home energy behavior modification startup Opower and others.
Running lots of different home energy devices from the cloud could allow utilities to bring disparate demand response, energy efficiency and home area networking programs under one roof. Think of it as Honeywell's umbrella device-to-cloud network, available for rent. Theoretically, it also opens up lots of smart thermostats bought by homeowners or channel partners like HVAC installers to utility programs yet to come. Honeywell's already selling thousands of such thermostats today that cost about $300 to connect to the cloud. The company also has a Wi-Fi thermostat coming out early next year in the $100-to-$150 range.
It’s far from the first cloud-computing platform meant to tie utility smart grids to smart building devices -- others include Digi International, Tendril, EcoFactor, EnergyHub, Control4, Verizon and AT&T, to name a few. Still, Honeywell’s market might could give it a big head start. The big question for Honeywell and all of its cloud-based competitors, of course, is whether utilities are ready to make the shift from controlling their own computing to turning to a cloud provider to do it.
Building the Cloud From the Ground Up
Honeywell hasn’t announced any utility customers yet for its cloud service, though it is in advanced discussions with several large utilities, said Brad Paine, Honeywell’s director of product marketing for smart grid and energy products.
But while the “cloud-to-ground” terminology is relatively new, the cloud service it’s built upon has been around for a decade or more, he said. That’s Honeywell’s AlarmNet security business, which links home security gear to a supporting cloud infrastructure that handles customer registration and support and device connectivity and management.
Next up are cloud-connected thermostats. Honeywell’s Prestige thermostat, which has been deployed with pre-programmed time-of-use pricing for utilities like Arizona-based Salt River Project, is now being built to be able to upload new programs and functions via proprietary wireless Redlink to an internet gateway, Paine said. Honeywell has shipped about 4,000 of those devices to installer partners, but with the gateway to connect to the internet, they’re still pretty pricey: about $300 on their own, with different devices that connect to it swelling the price to $500 and up.
Cheaper options are coming. In the first quarter of 2012, Honeywell plans to launch a Wi-Fi-enabled MiniPro thermostat -- a version of its UtilityPro thermostat that’s shipped about 350,000 units as of last year -- that will sell in retail stores and online, as well as into professional trade and utility channels. Because it won’t require a gateway, it will be cheaper -- about $100 to $150, Paine estimated, which puts it within range of the cheapest Wi-Fi thermostats now available from Radio Thermostat of America and others.
Right now Honeywell is depending on broadband in the home to connect its gateways and Wi-Fi thermostats to its cloud, but the company has cellular connectivity “on our roadmap,” Paine said. But Honeywell isn’t planning to use its cloud platform to connect smart meters right now, he added. Smart meter networks tend to be too slow and connect too infrequently to run in the real-time, data-rich manner best suited to a cloud’s capabilities.
An Application Platform Featuring Opower and Others
What can customers do with these new cloud-connected thermostats? Well, for now, Honeywell is providing its Total Connect Comfort web portal, complete with smartphone and iPad applications, to give homeowners control over temperature settings and how those interact with energy usage and pricing data. (Here’s a demo, if you’re interested.)
As for partners, Opower will be among the first third-party applications to connect with Honeywell-branded thermostats over the cloud, Paine said. Opower has landed a lot of utility customers interested in its energy use behavioral modification program, which has succeeded in driving two to four percent energy reductions with old-fashioned mailed efficiency reports, as well as email and text alerts.
Opower and Honeywell announced a partnership in September aimed at delivering Opower’s efficiency smarts via two-way communicating thermostats. The idea, shared by other smart thermostat platforms out there, is that giving customers the digital connection to make efficiency decisions in real time can boost energy savings from single digits to the 20-percent-and-up range.
“There’s a whole level of comfort, convenience, flexibility and control that comes just from putting together this two-way communications infrastructure,” said Jeremy Eaton, VP of Honeywell Energy Solutions. But putting it in Honeywell’s resident cloud opens up the possibility of adding more and more devices -- and applications that expand their capabilities -- over time.
Rent-a-Cloud Proposition for Utilities
“Down the road, what you can imagine is, it doesn’t really matter how the device gets in the home,” whether via the utility, HVAC contractor, or homeowners buying smart thermostats off retail shelves, Eaton said. “In all those cases, the two-way devices will communicate with our cloud infrastructure, and be accessible to the utility.”
Why not rent out the cloud to run multiple programs over the same IT backbone? “As we start to get hundreds and thousands of end-points on line … all you have to do is plug into the server infrastructure and connect to the load,” Paine said. That, in turn, should make it a lot cheaper for utilities to develop and deploy new efficiency, demand response, home connectivity and other programs -- particularly if they’re tapping devices already in people’s homes.
“Until we actually execute one and see what the total costs are, I can’t give an actual number” on how much cheaper that may be for utilities, Paine said. “But it should be considerably more affordable than utility-sponsored, pay-for-everything type programs.”
So Many Clouds to Choose From
This is not an unusual observation in the world of cloud-based utility services -- and Honeywell is not alone in positioning itself as best equipped to handle the challenge at the best price.
One interesting competitor is Digi International, a company with decades of experience in industrial machine-to-machine networking and management. Digi has been expanding into the smart grid in a big way, supplying and managing ZigBee networking gear for such clients as smart thermostat provider Cooper Industries, home energy device maker Schneider Electric, smart meter maker Itron and demand response provider Comverge and Texas energy retailer TXU.
In other words, Digi offers cloud-based device management, just like Honeywell is doing -- and it offers it to a variety of vendors, albeit via solutions that they aren’t sharing. Digi’s new partnership with cloud platform provider AT&T -- a company which also happens to enable two-way communication to about 13 million smart meters on its U.S. networks -- adds heft to the idea that Digi can deliver enough cloud computing to get the job done.
Verizon's cloud service-based home monitoring business, which launched last month, is another potential broadband challenger. Verizon’s new subscription service gives homeowners Z-Wave-enabled hubs, thermostats, cameras, door locks and lighting controls, at installation prices ranging from $70 to $220. Verizon also provides a cloud platform for partner eMeter, which runs meter data management software for lots of big utilities, and eMeter has a home energy platform it’s tested in Washington, D.C. -- could that find a way into Verizon’s home monitoring play?
Then there are all the cloud-based home energy software players that could be competitors or partners. EcoFactor’s cloud platform links to broadband-connected thermostats to both draw data from them and program them for more efficient temperature settings, all without direct consumer control. EnergyHub, which is also a Honeywell partner, is providing its user interface software for Radio Thermostat’s Wi-Fi-enabled thermostats, starting by year’s end. Home energy startup Tendril is linking its Tendril Connect cloud platform to smart meters from Elster, smart appliances from Whirlpool, geothermal water heaters from WaterFurnace and home control systems from Vivint, the home automation player that recently started offeringsolarpanel leases.
It doesn’t stop at the residential front. Light commercial customers share many characteristics with homeowners, namely, tight budgets and lack of energy awareness, that might lead them to invest in simple cloud-controlled thermostats before diving deep into full-bore energy management. Honeywell controls megawatts of demand response over servers built by Akuacom, a company it bought last year. Akuacom uses an open standard called OpenADR to send and receive data from servers in individual building -- the kind of device management task that could migrate to the cloud over time.
Likewise, Lockheed Martin is offering a cloud platform for small municipal and cooperative utilities to host demand response and load control, and Oracle and IBM are trying out massive computing clouds to handle just-in-time smart meter data needs, like checking the billions of bits of data that make up the millions of billing statements being mailed to customers to make sure their bills are correct.
At the top of the pyramid might be cloud-based enterprise systems to help utilities connect all these different aspects of their operations and management -- or at least a way to connect all these clouds together. Whether there’s enough critical mass to make a perfect storm, so to speak, remains to be seen.