Smart Appliances: Star Trek or Stars of the Smart Grid?

Recently there was a Park Associate white paper titled, Consumer Attitudes and the Benefits of Smart Grid Technologies (you can download the paper at the link), talks about the plight of smart appliances and their slow evolution and adoption. Some of the reasons are:

  • Consumers are unlikely to replace existing appliances with smart appliances until existing appliances fail or become too expensive to maintain.
  • The premium most consumers are willing to pay for smart appliances is unlikely to cover additional material costs.
  • Public utility commissions (PUCs) will have to approve rate structures that accommodate smart appliances, a potentially time-consuming process.
  • Many consumers balk at allowing utilities to control their appliances.

Yes, there will be additional costs. Yes, PUCs and utilities operate slowly (or at least slower than Internet pace). Yes, consumers are finicky at best and these days are not willing to part ways with their cash unless they are either emotionally attached (READ: iPhone et al) or see a great benefit for themselves and livelihoods (READ: save lot’s of money). And kinda yes, consumers aren’t terribly crazy about having utilities, or anyone for that matter, control stuff inside their homes.

With all this stated, there are STILL great opportunities to bring really cool services and savings to consumers related to Smart Grid technologies, even if they’re not initially offered by the utilities.

  1. Replace existing appliances? Not necessarily. There are existing and emerging plug load management devices with wireless connectivity (OSIAN from People Power, ZigBee, ZWave, etc.) that may give consumers all they need to know for the time being…how much is this appliance costing me per month, year, or right now.
  2. Smart appliance premiums? Not necessarily. There are some CE manufacturers that are using “smarts” in upcoming devices and appliances for creating new upsell services and reasons to reach back out to their customer base. And the manufacturers are not passing the cost of the embedded smarts to their customers but rather they see it as a new sales and marketing vector which didn’t exist before.
  3. PUCs need to approve smart appliance rate structures? Maybe. Recently at the OpenSG conference I attended in Ft. Lauderdale, FL, there was great dialogue and action being taken by the various industry consortia and standards development organizations (UCAIug, NIST for example) driving various specifications and recommendations which will undoubtedly create tension to the regulators for needing to “think outside the box”. Jury is still out, but I’m hopeful.
  4. Consumers reluctant to allow control of their appliances? Maybe. Control on day 1, unlikely. But visibility and enabling the consumer to monitor, very likely. Control or “proactive management” will come after the consumer sees value in modifying behavior and someone else (utilities, ISPs, Google, whoever) can do it for them inexpensively, securely and reliably.

It is possible Park Associates is looking at the consumer sentiments with an overly utility-centric lens but it is my belief that consumers will modify their behavior if they see direct benefits to themselves and their lifestyles. When the price of gas shoots up to $4 or $5 per gallon (in the US), cars are driven less, people work at home more, take more public transportation and other non-standard behaviors. The same can happen with a good plan, novel solutions and no-brainer benefits to the wallet holders.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s