Guest blog by Maia Hinkle, Research Analyst, Parks Associates
Consumers are becoming more aware of smart devices that help them manage their home’s electricity usage. Research from Parks Associates finds:
- Roughly 10% of U.S. broadband households own a smart energy device. Smart thermostats are the most commonly owned smart energy device—adoption increased from 5% in the first quarter of 2014 to 8% in the third quarter of 2014. Smart lighting products are similarly popular with an adoption rate of 6%.
- The top two most appealing smart energy management features are the ability to use sensors to automatically turn off lights and appliances when a home is unoccupied (34% of broadband households) and to receive alerts when energy usage is high (34% of broadband households).
- One-third of U.S. broadband households find at least one smart energy management feature appealing.
- Adoption of smart thermostats is on the rise, and Honeywell and Nest smart thermostats account for 40% of all brands purchased in the past 12 months.
Highly differentiated smart products are capturing a significant slice of the overall market—42% of broadband households that are likely to purchase a smart thermostat are willing to pay a premium for a thermostat with advanced features.
The majority of broadband households that want a premium thermostat are also likely to proactively replace a working thermostat. For utilities, this finding means that the traditional model of selecting partners and piloting products will not be successful, as the pace of change in the smart product market is out of sync with the pilot process.
Smart energy devices are naturally priced at a premium compared to “dumb” devices; however, even within the smart category, there is space for premium products. Many consumers will pay more for smart energy devices with greater functionality. Early adopters in particular are good candidates for robust solutions charging healthy premiums over traditional devices.
TRENDS TO WATCH
- Utility programs that allow consumers to bring/use their own thermostat(s).
- Further advancement of smart devices with advanced home energy management value propositions.
- Energy management as a bundled service.
Growing the Energy Management Markets
Consumers are more receptive to smart energy services than devices—approximately two-thirds of U.S. broadband households are willing to pay for a comprehensive bundle of smart energy services. Utilities and smart home service providers should oblige consumer preferences and position their offerings as services rather than devices.
Consumers view energy management services as interesting and even desirable, but when bundled together, these value-add services become attractive enough that a significant percentage of consumers are willing to pay for a package of services.
Parks Associates will address the expanding market for energy solutions and home controls and its impact on utilities, service providers, retailers, manufacturers, and consumers during the sixth-annual Smart Energy Summit: Engaging the Consumer, taking place February 16-18, at the Four Seasons Hotel in Austin, Texas. The summit agenda features industry thought leaders who will evaluate new partnerships, strategies for consumer engagement, and deployment plans for energy and management solutions in the connected home.
For more information about the Smart Energy Summit, click here.