Is Energy Management the Killer App For the Home Automation Market?

1Executive Summary

The market for home automation technology is kind of like recycling: Many talk about the benefits, but a lot fewer end up participating. That’s always been the problem with home automation products; gadgets and networks that are installed in homes and enable users to wirelessly and remotely manage digital security, entertainment systems, and appliances have sparked some popular interest, but never mass-market adoption. Only 2.8 million home automation systems are expected to be shipped in 2011, according to data from ABI Research.

But today home-automation companies like Control4 and AlertMe are using their products as a door into the emerging home energy management market. By either repackaging existing technologies or adding on new energy-focused divisions, the startups see an opportunity to piggy-back on an industry that is set to benefit from the vast amounts of stimulus money that will be invested in the smart grid ecosystem. Add to that growing interest from some early adopters looking to cut home energy bills and carbon footprints, and some are wondering: will energy management really be able to deliver the killer app that could kick start the slow-moving home automation market?

Market Ecosystem
In terms of consumer adoption, home energy management technology is still a very nascent market on its own. But it has definitely emerged this year as a hot topic, and it’s seen as an exciting new business opportunity for companies across sectors. Clint Wheelock, analyst for Pike Research and GigaOM Pro, says he’s counted 25 different players chasing the home energy management industry, including large Internet firms like Google and Microsoft, smart grid system vendors like eMeter, pure-play startups focused on the energy management space and home automation vendors that have added on energy management products.

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