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The role of the utility of the future in the home of the future

Predictions for the Home of the Future all agree on one key characteristic. It will be a smart home. An intelligent home. A connected home. The intelligent home of the future will have embedded technologies, broadly classified under the umbrella term “Home Automation Systems,” which will offer customers a solution to automate and control various aspects of their homes to provide improved convenience, comfort, efficiency, and security.

A home automation system will include features related to communication, information, and entertainment such as a virtual personal assistant to read news headlines, one touch settings for home theater, and whole house audio. “Telecare” features will offer automated reminders to take medicines, keep track of doctor’s appointments, remote health monitoring, and medical alerts for seniors or other vulnerable members of the family.  Security features will include remote control and surveillance of doors, windows, and blinds, one touch settings to activate motion sensors and security cameras, control of interior and exterior lights, and the ability to automatically lock all the doors when away.

Energy management features will offer residents indoor climate control features with schedules for heating and cooling based on time of day, month of year, and annual including season change, temperature and humidity. Such systems will allow residents to monitor energy usage from appliances and facilitate appliance usage automation to take advantage of lower prices for energy at certain times or avoid times with high energy prices.

While the technologies are emergent and the market is still in a nascent state, it is effervescent with players from several industry verticals jockeying for position, from retailers such as Amazon and device manufacturers such as Phillips to platform providers such as Apple. Also in the mix are the industries that have traditionally had “wires to the home”—communication providers such as AT&T and Verizon, entertainment providers such as Comcast, security providers such as ADT, and energy providers—that are making a play to have a larger role in the home of the future.  This is an increasingly convergent market and several market actors’ strategy seems to be one of developing an integrated solution—Google’s acquisition of Nest represents the combination of platform (Android), communication (Google Fiber), and device manufacturer (Nest).

Several utilities already play in in the home energy management market which directly overlaps with their core business.  So, why should energy providers/utilities care about the broader market for home automation systems? Two important reasons: 1) Home automation systems will enable better delivery of existing energy efficiency and demand response utility programs. 2) Most customers don’t have the time or interest to deal with myriad controls in the increasing number of smart devices and home appliances, hence intelligent automation becomes critical in the home of the future.

DNV GL has conducted proprietary research amongst over 1500 respondents in the US and 5000 respondents in the UK, Spain, Germany, Italy, and Ireland to help answer this and other important questions such as: 1) What are customers looking for in the home of the future? 2) What is the market potential for a focused offering versus a bundled/integrated offering? 3) Who are the providers with dominant mind share amongst potential purchasers of home automation systems? 4) What are potential roles and strategic partnerships for the utility of the future?

Figure 1

Figure 1: Variables for an intelligent home. Source: DNV GL 

Results from this research will be released soon.

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SAVE THE DATE! The 2015 Utility of the Future Leadership Forum is June 1-3, at the Washington Marriott at Metro Center in Washington, DC. Visit www.dnvgl.com/UofF2015 or follow #UofF2015 for more information. Registration opens January 5. 

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