Australia’s homes just got smarter

Australia’s smart home market growth has been limited by various challenges but startup Evergen may just ignite some much needed competition.
Published: Tue 30 Aug 2016

Renewable energy start-up Evergen has launched Australia's first intelligent home energy management system, with the technical backing of Commonwealth Scientific and Industrial Research Organisation (CSIRO). Combining solar panels and batteries with smart technology, the system continuously analyses and optimises home energy consumption. The system chooses the most efficient source for the household's electricity supply at any given time, switching from solar to stored power as needed. The system, remotely managed by Evergen and regularly analysed and updated by CSIRO, looks at the power consumption patterns of each household as well as the local weather to help make smart decisions that are aimed at reducing energy costs. The Evergen intelligent app enables consumers to monitor their integrated system in real time and see how much energy they are saving.

Evergen’s chairman Stephen Dunne has described the system as being the “gateway to energy-smart homes of the future.”

Australia’s sluggish smart home market

Certainly, these words are exciting for the Australian smart home market which has experienced a relatively slow uptake in comparison to other global markets. According to Statista, revenue amounts to US$143.8 million in 2016 and is expected to show an annual growth rate (CAGR 2016-2020) of 37.62% resulting in a market volume of US$515.9 million in 2020. Household penetration in 2016 stands at 1.02% but is expected to hit 5.15% in 2020. In comparison, the US generated US$9,712.5 million in 2016 alone. The US and Europe are currently the biggest markets.

With consumers demanding more control over their energy consumption, intelligent systems are in demand and competition is fierce in the US and European markets as companies look to develop the smartest piece of tech.  But, why has this not taken off the way it should in Australia? Limited choices, marketing and system integration may be holding the market back according to Mitchell Klein, head of the Z-Wave Alliance, a global consortium of 300-plus companies that develop products and services using the Z-Wave protocol. Z-Wave is a low-power wireless communications platform that utilises sub-Gigahertz frequencies and operates using mesh networks with 128-bit encryption and IPv6 support also integrated into the platform.

Klein says that security companies like ADT and Vivint in the US are driving the adoption of smart home technology as part of their home security offerings through aggressive advertising campaigns. While there are a few security companies in Australia that offer similar smart home capabilities, the amount of marketing to promote these add-ons is nowhere near the extent to which the US market advertises.  

Added to this is the lack of choice when it comes to smart home products in Australia when compared to the US. Klein believes that Australia’s consumers feel obliged to implement their own solutions.

There is also a concern around the multitude of smart home platforms, protocols and standards being promoted by multiple companies. Klein says this could cause issues for customers both now and in the future. He doesn't expect a single smart home standard to be the solution, for a number of reasons. Firstly, businesses will not want to use each others’ technologies from a competitive viewpoint. Secondly, the lack of a smart home standard lies in the technical capabilities of the communications protocols being used. He explains: “There’s no one protocol that can do everything perfectly; for example, WiFi is ubiquitous and is wonderful because it can transmit huge payloads but the problem is it’s terrible with battery power and the more devices you attach to a WiFi network, the more congested and slower that WiFi system becomes,” he said. He points out that multi-protocol smart homes will have to become an accepted reality, due to the capabilities and limitations of each. “This is where Z-Wave tries to address the issue of multiple standards by being vendor-agnostic, where all 1,500-plus products available with Z-Wave compatibility are all interoperable with each other.” Despite this, he foresees challenges with integration and compatibility with non-Z-Wave products and says that these challenges must be addressed to ensure consumers’ freedom of choice is maintained.

Australia’s smart home market is attracting innovation

CEO of Evergen Glenn Platt told Engerati that traditionally the Australian home energy market has been incredibly fragmented, with consumers unsure as to who they can trust but the tide seems to be turning. He explains: “In general, it is a market that is only just coming of age until this point having been dominated by a few large energy providers who have offered limited choice around the nature and cost of our energy. Australians are now paying attention to how and when they use energy, and keen to be active in where it comes from.”

Escalating power costs, grid reliability and a growing awareness of the environment is driving the need for customers to control their energy experience. According to Platt, solutions such as Evergen are timely as the new energy market comes of age.  “Australians now have some great independent choices that are affordable and accessible to a broad range of consumers - not just those who are either wealthy, early adopters or environmental champions. Australia is leading the world in this transition, with many international organizations launching new products here before anywhere else in the world.”

“Enormous” market opportunities

Evergen believes there is enormous scope to transform Australian houses into homes that are efficient, smarter and more autonomous by using smart technology that learns your movements and adapts to your needs. “With technology like Evergen, people can have the lifestyle they are used to, together with much lower energy costs and a low impact on the environment”, says Platt.

As well as batteries and solar, intelligent management technology can bring further benefits, automatically controlling energy consumption.“We anticipate future developments such as load management, energy recommenders and virtual power stations.”

The early Australian adopters of solar panels are challenged by the ending of their feed-in tariffs and thus soon increasing energy bills. This brings an opportunity for technologies such as Evergen to help these customers avoid the dramatic increase in their bills, by storing solar energy for when it is most useful to the customer, he explains. There is also an opportunity to create smaller systems which are suitable for smaller homes and apartments and are not as reliant on large roof areas for solar installation. This technology will advance in the coming year or two. 

Platt predicts the following:

•      Load management – the automatic coordination of loads such as your home’s pool pump or electric hot water system to operate with the batteries and solar.

•      Energy recommenders - currently under development by CSIRO; this technology analyses the power characteristics of your home to identify specific appliances and the way they use energy, and recommend better, more efficient solutions.

•      Virtual power stations – it will be possible for neighbours to agree to sell their spare battery capacity back to the grid at times when it’s struggling. Together, the combined energy systems could act like one big power station but better because the power would be delivered to where the grid needs it most. The community would get more reliable power and the neighbourhood would get paid for helping for supporting the grid.

So what is Platt’s recommendation for market entrants? He says: “The renewable energy market is growing in scope and importance and is part of a long-term shift by consumers who want to take control back over their energy consumption, prices and reliance on the grid.  Future market energy entrants need to be mindful of these trends and offer customer choices that are genuinely consumer and environment friendly.”

The Evergen system is now available to Australians in an early release programme, with a second-stage release in January 2017.

Join our webinar, Empowering Residential & SME Consumers with Demand Response on 1 September to gain a deeper insight into the smart energy landscape and how it is set to afford residential consumer and Small Medium Enterprises (SMEs) the opportunity to take control of their energy destiny. From onsite generation and rise of prosumers to increasing availability of energy data and contextual information via the IoT the energy sector is seeing a grass roots consumer revolution.Find out how best to take advantage of these emerging paradigms. This webinar is part of our 'Demand Response' In Focus track on engerati.Follow this link for more insights!

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