Tremendous growth forecast for home energy management

Analyst: Security companies can use their close relationships with customers to drive the market
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Monday, March 26, 2012

DALLAS—A recent Parks Associates study predicts home energy management will become a huge market during the next 10 years, and security companies are in a unique position to take advantage of that through their close customer relationships, according to an analyst with the market research company.

“I think they have a great opportunity to drive the market, at least in the early stages,” said Tom Kerber, director of research on home controls and energy at Parks Associates, based here.

Parks Associates found that 60 percent of U.S. homes will have energy management technologies by 2022, and that the market will generate $180 million by 2015. The study was a topic of discussion at the 2012 Smart Energy Summit, hosted by Parks Associates in Austin, Texas from Feb. 28 to March 1.

Currently, about 5 percent of homes have energy management technologies, Kerber told Security Systems News.

He said the “explosion of smartphones” and other new technologies that help homeowners manage their energy usage remotely are helping to drive the tremendous growth.

He noted that more smart meters are being installed on homes. “In the time frame [of the study], probably over 50 percent of homes will have smart meters and they will have the ability to communicate with devices in the home,” Kerber said. So, he said, home security/home automation systems “will likely have a connection to that [smart] meter and so the meter will be part of that system.”

He said another factor that will drive adoption are features like the one that Comcast recently announced it is adding to its Xfinity Home home automation/home security product

Comcast said in February that it has an agreement with EcoFactor, a provider of energy management solutions, to develop a new solution integrating EcoFactor’s cloud-based software with the Xfinity platform. The new solution will collect data on the weather, the thermal characteristics of a house and the temperature preferences of its occupants and use them to make thermostat adjustments to save the homeowner money.

“Having devices in your house that make smart decisions on your behalf I think is kind of where the industry is going,” Kerber said.

He said customers want the latest in energy management capabilities, but because the devices are new “they require some education.” That’s where security companies have a unique advantage, Kerber said.

“I think what the security channel offers is that the installing dealer has that opportunity to have that face-to-face interaction with the consumer,” he said. “… They have the opportunity to ensure the initial user experience is well-managed and is exceptional.”

Dave Simon, president of Just Write Communications, who provides consulting services to the security industry and writes a weekly blog for the Irving, Texas-based Electronic Security Association, told SSN that home energy represents an “evolution in the security industry.”

“What the study is saying is that it’s going to accelerate … and a number of factors are going into that,” he said. One important factor is that “the next generation is going to look for that stuff though their smartphones and is going to want this.”

In a March 12 ESA blog posting, Simon urged security companies to heed the study’s time line. “You may think those dates are far in the future but they aren’t. It will be here faster than you think, and now is the time to start looking at how you can profit from this trend,” he wrote.

“This may mean you penetrate a new market or that your product line evolves along with the desires of your customers,” he continued. “Whether you invest in this trend or not, the company you are today will change between now and 2022, and it’s better to be aware and prepared for what the customer of tomorrow will seek.”