EnergyHub makes beeline to consumer smart grid

EnergyHub is going to see if it can pique consumer interest in the smart grid without utilities.

The Brooklyn-based company plans to start selling a relatively high-end home energy management system next month from its Web site, its first effort to bypass utility or cable company channels. For the residential energy business as a whole, the program could help signal the level of interest for energy efficiency and control technology.

EnergyHub's initial consumer product package is focused on a smartphone-size touch-screen console, or Home Base, which shows power usage of the whole house when connected to a meter. People will able to buy a wireless thermostat or networked power strips to control individual appliances, such as an air conditioner or home office equipment.

The home base itself costs almost $200 and a package with the home base console and a wireless thermostat is priced at $274.99, according to the Web site the company set up for the beta program. A starter kit with the console, a wireless multi-prong power strip, and socket is priced at $299.99.

For people who have hefty electricity bills, the system will pay for itself in a few months, said company CEO Seth Frader-Thompson. Finding out which appliances consume the most energy can help people make adjustments, such as changing air conditioner settings or turning off unused electronics. In its utility-led efficiency programs, the target is on the order of 20 percent energy reductions.

But EnergyHub is seeing demand from people who want a home energy system as much for the control it provides, he said. Frader-Thompson, for example, uses an Android phone to turn on the air conditioning and put electronics on stand-by mode before getting home. The base station itself has three buttons for "home," "away," and "goodnight" that automatically change settings of thermostat and other plugged in devices.

In this second-generation product, EnergyHub is targeting early adopters who want to try the latest consumer technologies. "It's a mix of the economic benefit which appeals to people's rational side along with the convenience and the cool factor, or the gadget interest," he said.

The beta program will be limited to consumers with smart meters or meters from Itron which use a proprietary communications system. The company is expecting at least thousands of beta users.

The company is already making less-expensive versions designed to appeal to a wider audience. For example, EnergyHub is working with a large cable provider where the system will be more software-oriented and controlled by a smartphone or other connected device, rather than the Home Base console, he said.

Slow burn?
EnergyHub's decision to see directly to consumers reflects how slowly utilities are making consumer smart-grid technologies available, said Bob Gohn, an analyst at Pike Research. With millions of smart meters installed, utilities have launched programs to make real-time electricity information available to consumers but they largely remain in pilot mode, he said.

To some degree, it's understandable that utilities which have invested in upgrading their networks have been cautious on the consumer smart grid. Creating a link between the utility network and customers' home networks brings up questions over security, privacy, and control, Gohn noted.

Also, sometimes regulations need to change to realize money savings. Consumers can move power-heavy jobs to off-peak times, such as running a dishwasher, but utilities need to have variable rates for peak-time demand-reduction programs. Many utilities offer a flat rate regardless of the time.

But even with the slow uptake of consumer energy technology, there does appear to be significant demand, Gohn said. How big that demand is and what consumers are willing to pay is something many smart-grid technology companies are still trying to figure out, though.

"There is an appetite for some consumers to get a better understanding of how they use energy and find ways to be energy conscious. With money getting tighter, I suspect after this heat wave, people will look at their bills and say 'holy cow,'" Gohn said. "Whether there's huge pent-up demand, I don't know about that."

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Last month, Microsoft and Google said they are retiring their respective home energy-monitoring Web applications, highlighting the difficulty for technology providers to make money in residential energy efficiency. Both companies said they didn't see the customer uptake they had hoped for.

EnergyHub's system is different from those products in that it includes hardware and has features beyond electricity monitoring, such as remote control of plugged-in appliances. Over time, EnergyHub plans to add energy-saving recommendations which are specific to the consumer, Frader-Thompson said. The technology also allows consumers to participate in utility demand-response programs to reduce peak power.

Frader-Thompson decided to sell directly to consumers because he was constantly being asked by people when they could try the system, indicating demand among early technology adopters. Through the beta, the company hopes to find out which features are most requested and how best to price the product, he said.

For venture-backed consumer smart-grid companies, the slow pace of customer uptake could end up being a problem if the industry doesn't develop quickly enough. But Frader-Thompson says that home energy management--either energy displays, smart thermostats, smart appliances, or other forms of automation--will eventually become commonplace in the U.S.

"We feel absolutely without question that in 10 years, all homes will have home energy management," he said. "It's just a question of what form it takes."