Demand response, the connected home and trust

In Northern and Central California, some PG&E customers have smartAC switchs on their HVAC units, which allows the utility to shut the compressors off for periods of 15 minutes during peak demand. Well they hit a snafu recently when the smartAC switches malfunctioned and turned off air conditioners permanently during a mid summer heat wave. Needless to say there were some pretty angry customers who immediately requested that PG&E remove the switch.

This is a small story that will blow over but it’s a cautionary tale. If the Internet of Things is going to prevail, it requires trust. The customer is trusting an algorithm or a service provider somewhere in the cloud to make decisions that impact the customer’s experience. And if that doesn’t go well, there’s a major feeling of disempowerment and inconvenience. We’re seeing the beginnings of the connected home and companies like Nest and EcoFactor are actively working with utilities to help them with their demand response programs by offering up connected thermostats that utilities could someday control. For those endeavors to work, the system will need to earn the trust of customers and not make the kind of mistakes that PG&E just made.

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Adam Lesser

Analyst Gigaom Research

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