Future Energy Trends: Getting Smarter About Devices as the Energy Marketplace Shifts into Its Next Gear

By: Beth Crouchet, Utility Solutions Leader at Resideo

One of my Resideo colleagues said it best: the electrical grid is the largest and most complex machine ever created by man. It’s needed to adapt to meet an array of ever-changing consumer preferences all throughout the last century. For example, in the 1950s and 1960s, the rise of consumer appliances and air conditioning was possible due to the introduction of interconnected power grids and, later, nuclear power. As the number of air conditioning units continued to increase, electric utilities had to build out and evolve their infrastructure to handle the load.

Fast forward to 2022, with the most significant climate bill in the U.S. history – the Inflation Reduction Act/IRA – now passed and signed into law. For companies, it incentivizes definitive investments in clean technologies that will, once again, change the grid. For consumers, a set of rebates, tax credits, and related savings await for people who invest in proven and next-generation energy technologies, that will ultimately help provide more energy options, accelerate the transition to more electric vehicles, and ultimately shift the grid into a new era.

In the U.S., Resideo (Honeywell International) was a big player during that mid-twentieth century transformation. And I'm excited to now be part of Resideo, a company that has the scale, expertise and market presence to help shape the future health and viability of our electrical grid.

Growing demand for smart devices, EVs and thus, electricity
Among those consumers who have converted to become a smart home family, research reveals that the smart home industry is indeed growing! According to recent data from Parks Associates, additional smart home devices – from thermostats and device-control products to security components, including doorbells and locks – have increased among smart home device owners, and on average, owners have eight of these devices. That means more energy but also more opportunities to better streamline and control, including consumption, for less long-term effect on a grid.

But smartening up around the house isn’t the only area of increasing interest for homeowners. Electric vehicles are rapidly expanding in the market as well, and consumers are beginning to see their benefits. Data shows us that 15% of U.S. households report intentions to buy an electric vehicle in 2021. According to Energy Saver from the U.S. Department of Energy, EV sales grew by 85% from 2020 to 2021.

As homeowners are increasing the number of many smart devices they have, and with more heads turning for electric vehicles, this creates a foreseeable growth in electricity demand and need for utilities to look towards leveraging these devices to control and save energy.

There is a lack of awareness around energy and information resources
When it comes to energy consumption, the old adage, “ignorance is bliss” does not apply. Research says that 44% of U.S. internet households say they’re actively working to reduce energy consumption at home.

However, familiarity with energy devices is low, and not only that, but consumers don’t know how to find and use energy information. Which is why it’s important for smart home professionals to offer solutions based on long-term value, not price, and stay up to date on manufacturer innovations to help influence consumer perception.

“Energy savings are an important benefit for consumers, and many households are taking an active role in monitoring and managing their energy consumption,” said Chris White, Senior Analyst, Parks Associates. “But for these solutions to be more universally adopted, they have to be easy to use and actionable. Our research consistently shows consumers want to see data on their energy consumption as well as guidance on how best to use that data, but they don’t always know how to get it.”

In fact, one third of internet households don’t know what kind of power they get from their utilities, and among those, over half (58%) don’t know where to find out, according to Parks Associates data. To build onto this, another Parks Associates study reveals that even fewer U.S. broadband households are aware of services that offer energy monitoring and management products from their electricity provider (only 19%). Many consumers aren’t even aware of who they’re buying electricity from. With all these unknowns shrouding the homeowner's energy supply chain, this creates a challenge in building awareness of new programs that offer energy efficient features.

Integration of bundles and services around energy awareness is untapped opportunity
The current legislation provides an opportunity for energy providers, utilities, HVAC dealers, solar installers and residential security players to provide products and services that help consumers better understand their energy consumption, what items in their home drive energy use, and how to seek out further information.

The benefit to the homeowner who receives a system like this is that it works together, offers unified control, better data insights across the home, solutions from a trusted source, unified billing, and discounts in bundled purchases. They also get energy savings (heating and cooling account for 50% of home energy consumption).

From a channel perspective, energy providers, HVAC dealers, solar installers and residential security players can now provide added value by teaching homeowners how their house uses energy and what is the impact on their comfort if they were to save energy.

The benefit to the channel is they can offer more hardware to upsell including a monitoring contract/RMR opportunity, more diversity in portfolio such as adding smart thermostat, solar installation, energy storage solutions, integration with EV chargers, security systems, and additional smart home products. These channel providers also benefit from a diversified portfolio, expanded distribution, and potential recurring revenue from monitoring services (e.g. HVAC, Security, etc.,).

The level of interest in smart devices, EVs, and the intent to save energy is most certainly set to increase as the Inflation Reduction Act’s provisions roll out over the coming months and years. However, that’s not necessarily the case for general awareness around energy and how to locate further resources. This makes the perfect opportunity for pros and service providers to educate homeowners and customers on smarter energy usage, bundles, and efficiency.

Teaching our customers about energy-saving devices, how to understand the data, and where to get more information is essential to help evolve participation in energy consumption and opens the door for programs that will help save energy, costs, and more.

*About Beth Crouchet: Beth is the Utility Solutions Leader for Resideo's Grid Services sector. Beth joined the Grid Services team in 2020. Prior to this role, Beth ran the residential Demand Response portfolio and led innovative research in the special projects team at Austin Energy, a leading utility in demand response. Having studied the effects of climate change on population dynamics, Beth has a deep understanding of the impact of fossil fuels and carbon pollution, which she uses to drive the energy strategy at Resideo. Beth has her Master of Science degree in Population and Conservation Biology.