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North American Utilities to Spend $577.8 Million by 2016 on Home Energy Management (HEM) Solutions

By: Transmission & Distribution World |

IDC Energy Insights has announced the availability of a new report, Technology Selection: North American Home Energy Management Spending Forecast, 2011-2016 (Doc #EI236935). The new report emphasizes that while growth in home energy management (HEM) investment will be more conservative than other areas in the smart grid, utilities in North America will spend approximately $577.8 million by 2016. To date, North American utility investment in HEM has supported pilot programs and test deployments. Looking to 2016, IDC Energy Insights forecasts broadening adoption as consumers become increasingly engaged and as utilities comply with regulatory mandates for home area network development as a critical component of the emerging smart grid.

IDC Energy Insights defines home energy management as an ecosystem of technologies and services that enable electricity customers to shift consumption behaviors in response to signals from the grid to see economic benefits and support smart grid goals. As home energy management becomes more widely adopted, utilities will continue to invest in enabling technologies and services, but shift the focus away from the in-home environment to shape a robust HEM business case and engage customers to change behavior through programs including demand response. Electric utilities in North America however, face a difficult challenge to develop the business case for home energy management in light of tepid adoption observed through pilot projects, current costs of HEM solutions and components, and the long cycle of changing consumer behavior with fixed electricity rate structures. IDC Energy Insights’ new report provides key elements of the HEM business case in the context of promoting the development of the smart grid and explores how changes in utility spending will impact the development of HEM.

“In the next five years, electric utilities will expand investment in technologies and services that enable home energy management because these solutions support the initiatives and goals of the emerging smart grid,” said Casey Talon, research analyst, Smart Grid Strategies, IDC Energy Insights.

Additional insights from the report include:

  • While there will be a decrease in investment in smart meters, we can expect an increased proportion of smart meters deployed will be capable of supporting and being utilized for HEM.
  • Customer investment on HEM devices will increase, specifically in smart thermostats.
  • Utilities will decrease investment in IHD as other options such as portals and Web pages prove cost effective for promoting behavioral change via consumer devices.