How Consumers are driving the Smart Home

Pilgrim BeartFounder, AlertMe

Smart Grids & Cleanpower 201123-24 June Cambridge UKwww.cir-strategy.com/events/cleanpower

Today

• State of the Market• What do we know?• The big picture• Latest market research results

• State of the Art• The Smart Home

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State of the Market

State of the Market

• Climate change and energy security raise significant challenges for everyone:• Government• Energy utilities & Networks• Consumers

• Challenges include:• UK committed to 50% CO2 savings by 2025

• DECC estimates that Smart Meters will drive only 2% savings in the home

• Utilities caught in pinch of maintaining profits while selling less energy

• Network operators facing increasing variability of supply• Consumers seeing more pain as energy prices rise, particularly in

these tough economic times

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Consumer can be a big part of the solution

• 30% of all consumption happens in the home• Cost increasingly MOTIVATES consumers to save

energy• Now if we can just EMPOWER them, they can be a

big part of the solution.

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Motivation + Empowerment = Action!

Motivation – Empowerment = Frustration

3 Steps to Empowering the consumer

Inform

•Show where the energy is going

•Towards itemised energy bills

Control

•Turn off consumption when house is empty

•Easy-to-use controls (e.g. online)

Automate

•Reduce management burden

•It just works: saves money, increases comfort

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Evidence from market

• Specific interventions studied by academia & commerce• In-home displays, intelligent heating controls, bill messaging etc.• But mainly only at small scale (qualitative)

• If testing 15% saving in home energy…• then studying e.g. 30 homes gives error bars larger than the effect• (even though the effect is ~£4.6bn/year nationally!)

• So need more studies at the scale of 1000+ homes• With control homes alongside

• DECC, LCN fund etc. now planning scale trials• Biggest-scale so far is CERT funding for in-home

displays• Has so far pushed ~1.5m real-time displays into homes• 6% of households• Evidence that they do drive some behaviour change• But how many are still in use?

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Consumer market generally

• What do consumers want?• Online is huge enabler• Be where consumers already are (e.g. social)• Appearance of Smart devices in the home• Back to simplicity

… so the Consumer is going in a particular direction: go with it

• Analogy:• We used to sit back and passively consume whatever was

broadcast for our delectation.• Now we:

• Actively participate in choosing what to watch• Can do so wherever we want• Even generate content ourselves, e.g. YouTube, Facebook etc.

• Likewise Energy and the Smart Home

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Evidence from market

• Evidence from AlertMe B2C customers• Every AlertMe customer is online• Rich, engaging dialogue with them:

• Analysing how they use the service• Day-to-day customer service• Engaging in surveys and focus groups for deeper

understanding

• To achieve quantitative rigour, we commissioned a large piece of market research by Critical Research.

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Market Research

Latest results

Consumer Market Research - May 2011

• Sample size: 1224 UK Homeowners• Sampling errors on a single sample

• For 95% Confidence Intervals:

10% / 90% +/- 1.5 percentage points

25% / 75% +/- 2.2 percentage points

50% / 50% +/- 2.5 percentage points

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Awareness of Terminology

“Do you know what is meant by the phrases‘Home Energy Management’ & ‘Home Monitoring’?”

Not sure

No

Yes

27

22

51

(%)

Base: 1,224 panel members

Awareness of Terminology

Definition: • Home Energy Management provides visibility, control,

and automation of home energy (electricity, gas, and heating) online anytime, anywhere. It uses real time two-way communication allowing consumers to manage and control a wide range of activities in the home over the internet and via their Smartphone. Users would save up to 20% on their energy bills, reduce their carbon footprint, and provide greater efficiency and convenience.

• Home Monitoring provides security tools such as cameras, motion sensors, door sensors, and window sensors with automation and ‘presence’ for immediate notification by text message of activity in your home to give you peace of mind.

• The two products together form the Connected Home.

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Awareness of Terminology

“Do you now understand what is meant by the phrases ‘Home Energy Management’ & and ‘Home Monitoring’ and ‘The Connected Home? “

Not sure

No

Yes

4

2

94

(%)

Base: 1,224 panel members

Rank Order of the Key Attributes

“Please rank the following attributes of the ‘Connected Home’ system in terms of appeal”

%’age giving Top Three Ranking

13

25

32

34

46

59

75

0 20 40 60 80 100

Latest technological innovation

Reduce carbon footprint

See and understand

Convenience & simplicity

Peace of mind

In control of your home

Helping save money

% Ranking

First

% Ranking

Last

42

15

17

6

6

5

3

1

3

7

8

11

29

36

Base: 1,224 panel members

Which Connected Home benefits do consumers value?

Save Money

Control Anywhere

MoreControlAccurate &Live

Info

Peace ofmind

Save energy

Security notification

Easier to use

Heating

Safety/Fire Notifica-tion

Other Convenience

Base: 1,224 panel members

Home Energy Management

• See a live view of your home electricity and gas consumption

• See it on an in-home display, on the web, your PC, or on your Smartphone or tablet

• See how much your electricity and gas is costing you, and predict your bill• By identifying where appliances waste money, this could save you £120 per year on your

utility bill

Home Energy Management - initial interest

“Having read / looked at the information,how interested are you in the idea of Home Energy Management?”

DK / No opinion

Not at all interested

Not that interested

Fairly interested

Very interested

Extremely Interested

3

7

12

36

27

16

(%)

Base: 1,224 panel members

Energy Monitoring – Offline or Online?

OPTION 1: A Free Energy Display. Your energy supplier gives you a colour display which you can put somewhere convenient in your home, such as on your kitchen worktop. It shows at a glance how much electricity you’re consuming right now, and gives you a running total of spend so far this week or month.

OPTION 2: Free Online Energy access. Your electricity supplier gives you a service which lets you check your household energy use any time you want on the internet, using your own computer, or your computer at work, or your mobile phone or tablet – all for free. It helps you budget by predicting your bill, and gives you specific advice on how you can save energy, for example by showing you which appliances are using the most energy, and how to use them more efficiently. You get more detailed information than Option 1, but you do need to log on to your computer or use an application on your Smartphone to access the information.

Energy Monitoring – Offline or Online?

Given the choice, which one would you choose?

Neither

Depends

Option 2 - Online

Option 1 - Display

8

12

40

40

(%)

Base: 1,224 panel members

Web or SmartPhone?“Given the choice, would you prefer online access to your ‘Connected

Home’system via a Smartphone or through the Web?”

Don't know

Both of these

Web

Smartphone

0 10 20 30 40 50 60

12

38

33

16

(%)

Base: 1,224 panel members

State of the Art

The Smart Home today

Home Energy Audit

Hub Gateway

Wireless OSGi HAN *Heating

Control

Appliance Control

Smart MeterData

EV Charging & Management

Broadband

AlertMe is a single HAN solution for the SmartHome, providing an affordable, expandable and open platform that gives consumers:

• Visibility and personalised information

• Remote control anytime, anywhere

• Intelligent automation to suit their lifestyle

MicrogenerationManagement

Safety & Security Applications

Real-time data

capture

Data processing

Control messaging

Open API

Partners

* OSGi Gateway enabling multiple Home Area Network (HAN) wireless protocols

What is AlertMe?

How it works

• AlertMe provides an OSGi gateway using multiple communications protocols to connect and control a broad range of devices in the home, both from AlertMe and 3rd parties. Using broadband connectivity via the AlertMe platform, users can access a wide range of cloud based services

• The platform also allows further device and service innovation such as Telecare and Smart Metering

• Multiple device drivers from the ‘Device Store’ and services through the ‘Applications Store’

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Intelligence / awareness through Device

Abstraction

Application download

Driverdownload

Device Management

AlertMe OSGi Gateway

‘DEVICE STORE’Driver Repository

Personalisation& Rules Setting

‘APP STORE’AlertMe and Partner apps

Device Customisation

OS

Gi S

DK

to p

artn

er

SensorsCamerasDetectors

ThermostatsAppliances Smart Plugs

Smart MetersSmart Grid

E – HealthDevices

Other 3rd

Party Devices

Services: SmartEnergy

Easy to use applications that enable consumers to take control of their home

• Tracks home energy use in real time

• Bill prediction and budgeting

• Home internal & external temperature

• Analytics for personal advice to reduce bills

• Appliance level tracking

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Dog heater

WashingMachine

Services: SmartHeating & SmartControl

• SmartHeating - Easy remote control of home heating

• Simple understandable control of home heating system

• Control from anywhere – mobile, online, in the home

• Save energy – only have the heating on when you need it

• SmartAppliances - Remote control of home appliances

• Schedule switch on/off times for appliances

• Presence-detecting key fobs control appliances automatically

• Monitor energy cost & consumption of major home appliances

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Home Energy services & potential consumer Savings

Awareness (near real-time use & cost) between 5-10% saving

Automation (climate control, lighting etc.) up to 40% saving

OnWorld Smart Energy Homes Q4 2010

Services: SmartMonitoring

• Self–install home monitoring system for peace of mind• Simple to install and use

• Secure: battery & GPRS backup

• Motion & contact sensors

• Video monitoring: fixed, pan & tilt, outdoor

• Safety applications: Smoke, Gas, CO, flood detectors

• SMS, call & email alerts

• Option to link with professional monitoring centre

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UTILITY CHANNEL TELCO CHANNEL RETAILERS DIRECT

External pressure to meet challenging targets

From a necessity into an opportunity for customer

loyalty

Looking to next value added services for ARPU

growth

An explosion of data opens e-commerce

opportunities

Big box and home improvement stores moving into energy

saving and Smart Home technology

Early adopters - consumers who

want to take independent

control of their energy use

Routes to Mass Market

In addition to selling direct to consumers, AlertMe partners with companies with large customer bases to deliver maximum awareness and engagement. Telecommunications companies, utilities, OEMs and retailers all have motivations for competing in the smart home arena.

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Smart Home evolution in 2011 & 2012

• Openness = Standards• Bringing it all together• Giving consumers choice• Allowing innovation• Ecosystem emerging• IP, OSGi, ZigBee, …

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The Smart Home: Sandpit for the Internet of Things?

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From a standalone proof of concept … to standards-based open platforms• Many ‘smart’ devices in the home

• Becoming internet-enabled, but 1:1 & M2H

Things in homeOpen

Gateway

Open HAN

Open CloudServices

Open WAN

UserExperience

Open Platform

IoT

• Platform-based

• Open standards, 1:many and M2M

How Consumers are driving the Smart Home

Pilgrim BeartFounder, AlertMe

Smart Grids & Cleanpower 201123-24 June Cambridge UKwww.cir-strategy.com/events/cleanpower