Smart meters and home automation – should we believe the hype

The UK Government has an ambitious target for reducing greenhouse gas emissions by 80% by 2050¹. Most consumers will be well aware of the need to reduce household energy consumption – either from rising energy household energy bills or the high-profile advertising campaigns around heating control technologies. One step to help tackle energy use and increase individual environmental responsibility is going to be the roll-out of smart meters. The plan is that by 2020 every UK home will have a smart meter² that monitors energy usage and communicates with suppliers.

A smart meter is an electronic device that records the consumption of energy in your home or business and communicates that information back to the utility company. It gives you real-time information about how much energy you’re using and what you are using it for, to encourage more informed choices and ultimately make you use less. The home automation market, expected to be worth £29bn by 2020, takes this one step further, through connected products that enable you to turn devices on or off remotely, or even by turning them off for you.

Additionally, there are smart or ‘learning’ thermostats, which provide better methods to control the delivery of heat, either by connectivity to enable a range of controls when away from home, or through learning methods which allow the thermostat to automatically tailor heating cycles and temperatures to the real requirements of the occupants.

One of the biggest players in the market is Nest, a home automation company that launched its first product, the Nest Learning Thermostat, in 2011. When Nest launched in the UK three years later it was entering a rather crowded arena. Similar systems were available, including British Gas’ Hive device, which was already installed in 50,000 homes. But Nest had a significant advantage up its sleeve; its owner Google. Earlier that same year the technology giant had acquired California based Nest Labs for a cool £2 billion.

Nest now sells 50,000 devices a month, which reportedly have together saved over 2bn kilowatt-hours of energy to date³. Put into context that’s enough to power the entire US for half an hour. Yet despite its success Nest has a new competitor to contend with.

Just last month Apple threw its hat into the ring with the launch of its first home automation tool, the Apple HomeKit. HomeKit is an app that allows you to control any smart device in your home such as locks, lights, thermostats or plugs, using a common language that devices from any manufacturer can understand and support. And promisingly, the HomeKit could easily implement a learning thermostat system by interfacing to thermostats and boilers. Of course all of this relies on you owning these smart devices in the first place, but with manufacturers such as Haier, Withings, Philips, iDevices, Belkin, Honeywell, and Kwikset all set to launch such products, their prevalence in our homes looks set to increase.

Yet should we believe the hype? A recent article in the Huffington Post tackled this topic and suggested that simply knowing how much energy you’re using won’t in itself increase efficiency or save money. Energy efficiency can be dependent on many other factors, aside from simply deciding to use less, such as the insulation in your home. If all the heat escapes through your windows, monitoring it won’t make a difference. There is also the ‘rebound effect’ where consumers who have upgraded the thermal efficiency of their properties have chosen to enjoy increased comfort instead of using the new efficiency to reduce the energy they use.

Currently energy consumption reduction is dependent on people actively changing their habits. It is hoped that the technology will eventually lead to initiatives such as personalised tariffs based on individual usage and the opportunity for consumers to sell electricity back to the grid, which would deliver more tangible benefits to end-users.

The launch of every smart meter, connected fridge and smart kettle is another step towards a connected home – and this is where we could start to see clear benefits for both the consumer and the supplier. Demand side management – where an energy supplier can cut or reduce power to non-critical household appliances at peak times, to offset short duration demand increases (such as the ‘EastEnders effect’: a surge in synchronized kettle boiling at the end of popular TV programmes) – could lead to an overall reduction in operational costs due to less reliance on fast-start, low efficiency electricity generation. Benefits to the supplier could be shared with the consumer by means of reduced premiums, and while this currently is a grand vision – it could be around the corner.

While the technology supporting these devices may be on the way to being realized, home automation is bringing countless new products into our lives, which means design aesthetic and user experience will surely become increasingly important. Perhaps one of the driving forces behind Nest’s success, in addition to its advanced technology, is the sleek and minimalist design of its products.

Traditional boiler control products have fallen into the ‘uninspiring white box’ design aesthetic with a user experience which was dictated by the information the boiler needed, rather than what the consumer wanted. In addition to Nest products being attractive to buy, the interface is centered around the user communicating how they feel (hot or cold) so the experience is designed for the user, not the boiler. This has allowed the ‘ceiling price’ for thermostats to be well and truly broken, in effect creating a new market for desirable control technologies.

Maybe then, this could be a less obvious ingredient to home automation’s success. Technology, and timesaving benefits to the homeowner are not necessarily the deciding factor in a purchase decision. Design and desirability often feature highly in the consumers thought process with attractive products giving a perception of higher value. In any market, especially one that has been traditionally dominated by unattractive household items, design, appearance and user experience can be compelling factors in a successful and profitable product. Understanding all the factors that influence the purchase decision is key to a successful product conceptualization and development.

¹ Climate Change Act 2008, http://www.legislation.gov.uk/ukpga/2008/27/contents
²https://www.gov.uk/government/publications/2010-to-2015-government-policy-household-energy/2010-to-2015-government-policy-household-energy#appendix-7-smart-meters
³http://www.theguardian.com/artanddesign/2014/jun/27/-sp-the-nest-google-technology-future-homes