Home automation will cut energy costs and enable the reinvention of utilities but first trust in technology must be built.
A new smart homes study suggests consumers will increasingly switch energy onto 'auto-pilot', a move which will lower energy costs and enable a more customer centric energy market structure.
The Smart Lives report, commissioned by the Energy Saving Trust (EST) and undertaken by Goldsmiths, University of London, studies the challenges and opportunities of introducing smart home technologies from a consumer perspective. The experiment involved the participation of consumers in an in-depth behavioural trial of smart home technologies which provided ‘live’ insights into how smart home innovation is received and experienced.
The new study shows that that the hype surrounding smart energy devices exceeds the level of understanding of their role in improving energy efficiency.
One of the key insights from the study was that for smart energy technologies to really show their full potential, trial participants wanted to give up control of their energy choices - empowering the ‘Home Operating System’ to decide when to switch devices on and off.
Ideally, smart energy technologies are meant to highlight our energy wastage, thereby shocking us to reduce consumption levels, but the study found that making data visible is not helping us to save energy. To create the biggest impact, the study suggests automating energy usage, thereby enabling intelligent systems to push usage into low tariff periods, when overall demand is lower and prices are lower.
The service-based UK economy is shifting from an ownership model to one built on access to assets and services. According to the study, to reduce consumption we must look beyond the individual and focus on enabling collective consumption, by creating a community of users, which uses, stores and saves energy using a transparent platform, so that the costs are shared out across everyone.
According to Dr Chris Brauer, Smart Lives Research Director, Goldsmiths, University of London, by automating the system, energy will be used collaboratively, as a service.
By employing automation and artificial intelligence in the home it’s possible to find an energy consumption “sweet spot” that will reduce costs and consumption. However, to reach this point, the community must be prepared to let smart home technology “take the wheel”.
But, do these technologies live up to expectations? Apparently, not. There is currently a large gap between industry expectations and reality. A lack of consumer engagement and understanding of smart energy technologies, such as smart thermostats and smart meters, could prevent UK homes from embracing smart energy technology and living up to their potential to fix the energy market.
Nick Hay, Director of Cleantech, Edelman, explains, “Energy is the last great British industry to be digitised and smart technologies promise a myriad of exciting benefits for homes. However, the Edelman Trust Barometer shows that trust in technology has dipped for the first time in 15 years. To prevent a generation of consumers being put off by dystopian visions of losing control, it’s vital that we build trust so that we’re confident enough to integrate smart technologies into our daily lives and behaviour.”
Smart home technologies have been adopted by around 14% of UK homes. By 2020, the Government has mandated a £14 billion rollout of smart meters into UK homes. The savings calculated from the smart meter rollout assume that 100% of households will opt-in to the scheme. However, it cannot be assumed that every household is likely to opt in, or that once installed smart energy technologies will become integral to human behaviour.
According to results from industry tracker Juniper Research, revenue from smart home technologies are set to exceed $71 billion by 2018, a massive jump from the $33 billion in 2013. This is a large market and one that utilities should get involved in since they already serve a large customer base.
So, it is clear that utilities have a major opportunity to find ways in which to support their customers as they attempt to change their mindsets about their energy consumption levels. By providing a range of trusted products and offering back up service and maintenance, customers are probably more likely to opt for utility-endorsed products. According to an Accenture report, The New Energy Consumer-Architecting For the Future, the majority of customers want to receive connected home services from their energy provider — more than any other kind of company which is not a specialist in connected homes.
Mike Ballard, Senior Director Industry Strategy, Oracle Utilities, US in his presentation How To Achieve Simple, Substantial & Reliable Energy Efficiency Through Customer Engagement, says that with programmes, technology and the industry itself growing more complex, it is essential to develop a robust relationship with the customer and gain trust in advance.
If utilities do this successfully, there is no reason why they shouldn’t enjoy the financial benefits of this growing sector, plus customer satisfaction will be at an all-high as utilities are perceived to be on the customer’s side since they will be offering well-priced and trusted smart technology and support services. Just good business sense, really.