Debate on the future likelihood of mass-scale roll-out of Home Energy Management systems often neglects the basic commercial reality that this is not something that the great majority of end users will want – or expect – to pay anything for at all.
Delta-ee recently completed a Multi-client Study on this very subject: Home Energy Management – the potential of heat (HEMh). Is it a game changer – and for whom?
One of the main feedback remarks we have received from the companies that have bought the Study (which is still for sale) is along the lines of “when we first read that remark we absolutely didn’t agree. Now we do agree with you, and are wondering how this market will happen.” Fortunately for them, the Study defines a number of Critical Success Factors that should help energy utilities and heating product companies to succeed.
To be clear: we do not believe that the price point is zero for everyone. There is in every country a small segment of the population that will pay a relatively high premium for innovative new products. They are usually ‘affluent greens’. Those countries with the highest numbers in this end user segment, including Germany & Austria, also coincide with those countries where the heating controls market is most sophisticated. These are the countries where most early deployment will take place.
But we do not believe that deployment on this basis will even get near 10% of the residential market. Indeed none of the offerings that we have seen in these particular countries, eg from utilities and telco’s, possess all of the Critical Success Factors. ‘Doomed’ is certainly too strong a word, but the signs, for us at least, are not hopeful.
On the other hand, our Study does highlight several examples of commercial offerings that are available today in Europe which, to us, show some promise. These are happening in a group of countries that includes Ireland, the UK and the Netherlands, and further afield in the US and Japan. In each case, however, the price point is not zero. It is low or, in some cases, very low. Critically, the end user proposition is not cost savings, but ‘comfort & convenience’ usually based around remote heating controls. The evidence at this stage suggests that this is something that that customers will pay a little bit for.
For energy and cost savings, however, the price point does indeed look like zero.
