The Home Area Network (HAN) market, which began with a simple Wi-Fi router for networked computing, is now emerging within the greater Smart Grid sector to serve the home with energy management and digital application solutions.  The implications of the this scaling market, and its Home Energy Management (HEM) sub-market, for homeowners, utilities and Smart Grid vendors are profound, as utilities seek a means to implement demand-side management programs and Smart Grid players vie for early-stage positioning in what will become a $750 million market by 2015.  This is especially true in light of the need for utilities deploying smart meter and advanced metering infrastructure (AMI) technology to deliver tangible benefits to residential markets.

With the industry’s competitive strategies continuing to evolve, analysts expect market positioning and strategic alliances to be the main focus for the dozens of new companies in the home energy and automation space.  We predict vendors serving the HEM market (displays, gateways, plug strips, etc.) to be locked in a competitive struggle over the coming years, with a massive industry shakeout inevitable.  Further, analysts identify the market’s greatest opportunities in providing value-added services to utilities, including conservation, demand-side management, enterprise software and integrating homes to become distributed energy resources for the utility grid.

This industry-leading report offers forecasts for six market sub-segments through 2015 and profiles more than 40 companies pursuing these markets, ranging from Fortune 100's to newly-funded startups. In addition, analysts examine the industry’s key standards, competitive strategies, and emerging opportunities for leveraging home control technologies to integrate homes with the emerging smart grid, as well as the utility business case for direct investment in the home.

Value-added Elements

• Utility and HAN Vendor Strategies for Engaging Consumers in the Home
• Competitive Market Analysis and Market Forecasts through 2015
• Economics of HAN Integration in Smart Grid Deployment
• Emerging Technology, Utility Applications and Key Standards Analysis
• HAN Vendor Positioning and Company Profiles

Questions for Competitive Decision-making

• What strategies are available to utilities interested in promoting consumer participation in the smart grid?
• What role does HAN technology play in the Home Energy Management market and are there other ways to move forward?
• What are the market barriers for HAN deployment and what is the utility business case for investment in the home?
• How will vendor positioning evolve as the market grows and what steps should vendors take to win in the coming market consolidation?

TABLE OF CONTENTS

1 EXECUTIVE SUMMARY
1.1 The Rise of the Networked Home 5
1.2 Market Forecast Summary 8
1.3 Vendor Taxonomy 9
1.4 Summary of Key Findings 10
1.5 Consumer-Friendly Language: A New Residential Energy Lexicon 13

2 THE MARKET
2.1 Market Evolution 16
2.1.1 The Rise of the Internet of Things 16
2.2 Networked Home Market Phases 18
2.2.1 The Tipping Point 18
2.2.2 Convergence and the Battle for the Living Room 20
2.2.3 HAN Market Phases 21
2.3 Home Energy Management Market Forecast 21
2.3.1 AMI Connected Home Forecast 24
2.3.2 Enterprise Software and Services 28
2.3.3 Conservation Services 29
2.4 Market Drivers 30
2.4.1 Networked Home Benefits 30
2.4.2 AMI Shortcomings 31
2.4.3 Early Adopter Consumer Segments 32
2.4.4 State-Level Energy Efficiency Mandates 33
2.4.5 Variable Pricing Programs 34
2.4.6 Open Demand Response Markets and the Emergence of Demand Aggregators 35
2.4.7 Residential Renewable Energy and Electric Vehicles 36
2.5 Market Barriers 37
2.5.1 High System Costs 37
2.5.2 Fragmented/Immature Distribution Channels 38
2.5.3 Complexity 39
2.5.4 Immature Standards 39
2.5.5 Uncertainty About Variable Rate Pricing 39
2.5.6 Myriad State-Level Public Policy and Regulatory Regimes 41
2.5.7 Security Concerns 41
2.5.8 Home Ownership Declines 41

3 HOME ENERGY MANAGEMENT TECHNOLOGY
3.1 Strategic Planning Considerations for Smart Home Integration 43
3.2 Home Energy Management Taxonomy 47
3.3 User Interfaces 50
3.3.1 In-Home Display/Controllers (IHD) 50
3.3.2 Web Portals 53
3.3.3 Smart Phone Apps 55
3.3.4 Social Media 56
3.4 Communications and System Components 58
3.4.1 Home Energy Management Gateways and Range Extenders 59
3.4.2 Communication Chips and Microprocessors 60
3.4.3 Microprocessors, Operating Systems and Software Development Kits (SDKs) 60
3.5 Monitoring and Control 61
3.5.1 Smart Thermostats 61
3.5.2 Power Monitoring and Control Devices 63
3.5.3 Lighting Controls 64
3.5.4 Smart Appliances 66
3.5.5 Electric Vehicle Charging Stations 66
3.5.6 Solar Power Inverters 67
3.6 Utility Applications 68
3.6.1 Demand Management Systems 68
3.6.2 Energy Efficiency 69
3.6.3 Asset and Systems Management 70
3.6.4 Security and Data Privacy 72
3.6.5 Data Management, Analytics and Integration 74
3.7 Standards for Plug and Play Interoperability 76
3.7.1 Using the OSI Reference Model as the Basis for Standards Comparison 77
3.7.2 OSI Reference Model as the Basis for Standards Comparison 78

4 ECONOMICS OF THE NETWORKED HOME
4.1 Utility Economics 92
4.1.1 Findings Summary 92
4.1.2 Peak Curtailment 93
4.1.3 Energy Efficiency 96
4.1.4 Investment Protection 98
4.1.5 Educate 99
4.1.6 Incentivize 99
4.1.7 Enable 100
4.1.8 Engage 100
4.1.9 Optimize 100
4.2 Consumer Economics 100
4.2.1 Distribution Partnerships 102
4.2.2 Appliance Automation 102
4.2.3 The Battle for Eyeballs 104
4.2.4 Incentives 105
4.2.5 Creative Business Models 106

5 HOME ENERGY MANAGEMENT VENDOR ANALYSIS
5.1 Vendor Profiles 113

6 APPENDIX
6.1 Energy Efficiency Consumer Segments 168
6.2 Variable Rate Pricing Experiments 169
6.2.1 PEPCO PowerCents Experiment 172
6.3 Residential Variable Pricing Programs 175
6.4 State-Level Energy Efficiency Programs 178
6.5 Power Consumption for Common Household Appliances 181
6.5.1 Appliance (Name Plate) Power Ratings 182
6.6 Regional Differences in Appliances and Power Consumption 183
6.6.1 Electric Space Heating 186


LIST OF FIGURES

Figure 1-1: Home Energy Management U.S. Market Forecast In $M
Figure 1-2: Home Energy Management Vendor Taxonomy
Figure 1-3: Gtm Research Lexicon For Residential Pricing Plans
Figure 2-1: Technology Advances: A Historical Perspective
Figure 2-2: Tipping Point Enablers For The Smart Home
Figure 2-3: Home Energy Management Market Segments
Figure 2-4: Home Energy Management U.S. Market Forecast Chart
Figure 2-5: Home Energy Management Market Forecast Data
Figure 2-6: Expected System Value For Ami Connected Homes
Figure 2-7: Ami Connected Home Energy Management Forecast Detail
Figure 2-8: Expected System Value For Broadband Connected Homes
Figure 2-9: Broadband-Connected Home Forecast
Figure 2-10: Expected System Value For Stand-Alone Energy Management Systems
Figure 2-11: Stand-Alone Energy Management System Forecast
Figure 2-12: Enterprise Software And Integration Forecast
Figure 2-13: Residential Demand Management Services Forecast
Figure 2-14: Residential Conservation Services Forecast
Figure 2-15: Networked Home Value Proposition
Figure 2-16: Energy Efficiency Consumer Segmentation Strategies And Offers
Figure 2-17: Technology And Data Requirements For Variable Pricing Programs
Figure 2-18: Expected Device Prices For The Smart Home
Figure 3-1: Smart Home Integration Challenges And Issues
Figure 3-2: Home Energy Management Taxonomy Relationship To Overall Smart Grid Taxonomy
Figure 3-3: Gtm Research Home Energy Management Analytical Taxonomy
Figure 3-4: Home Energy Management Vendor Taxonomy
Figure 3-5: In Home Displays From Several Vendors
Figure 3-6: Example Energy Management Ipad Application
Figure 3-7: Home Energy Management Portal Overload
Figure 3-8: Home Energy Management Smart Phone Applications
Figure 3-9: Social Media Applications For Energy Management And Sustainability
Figure 3-10: Smart Thermostats
Figure 3-11: Power Monitoring And Control Devices
Figure 3-12: Lighting Comparison Chart
Figure 3-13: Openhan Task Force Home Energy Management Lifecycle Specification