The utility’s role is changing, and regulation must change along with it – to spur innovation and respond to evolving customer needs. Modernizing the industry will require a dynamic approach.
A land rush in the burgeoning home energy management market.
to the Hohm page (it’s all online, no software to load) and enter as much data as possible about their homes, utilities and personal energy use patterns. The site then provides energy use profiles, comparisons to others (are you a miser or a hog?) and efficiency advice.
The application draws on building efficiency modeling and climate data licensed from the DOE’s Lawrence Berkeley Lab. Microsoft says Hohm is driven by a self-learning engine, so the more people participate, the more refined the profiles and recommendations become. In its debut iteration, Hohm generally isn’t connected to a customer’s actual electricity use—although in October, Seattle City Light offered customers a direct online link between Hohm and their monthly consumption data, saving them the step of entering it manually from their bill.
“We intend to evolve this into what we call proactive energy management and demand response,” Arnold says. “This is the first step along that journey.”
Microsoft is focusing on hooking customers with the interface and hoping later to fold them into a more robust application. “The second version is where we really get into home automation,” he says. “We’re doing a lot of work around this next generation—interactive energy displays, thermostat controls. The rollout is really just providing a big picture view of how the home is using energy. The long-term goal is to get more granular and interactive over time.”
Several utilities participated in the launch version of Hohm, including Puget Sound Energy, Sacramento Municipal Utility District, Seattle City Light and Xcel Energy. Like Microsoft, they see it as the first step in an ongoing development process.
“A lot is going on in this area,” says Raj Purohit, Xcel’s Web program manager. “We expect our customers to get real-time information eventually, but there are a couple of interim steps in the process. The smart grid won’t happen over night. At this point the Web is the best channel for customers to get the information we have.”
While Microsoft and others look to end user buy-in to drive their products, some developers take a more traditional path.
“The reality of the world is that in order to get to the consumer, the gatekeeper is the utility,” Kiesling says. “That means from a business strategy perspective, they have to sell to the utility.”
In one sense, the vendor’s stakes are higher. There’s a lot riding on every big pitch to a utility. But if they win the bid, their end-user customer acquisition cost is comparatively miniscule.
For example, ecobee, a smart thermostat manufacturer, sells its product to utilities for use in pilot programs in order to get the inside marketing track down the line.
“Most of the utilities we’ve talked to have a two- or three-step process,” says ecobee CEO Stuart Lombard. “They’ll do some really small scale pilots, sometimes less than 100 homes. Then they’ll move to a larger pilot in the range of 2,000 to 20,000 homes. For those pilots they buy the equipment. When it comes time for broad rollout to their customer base, they’ll say to the consumer,