Last we left Home Energy Management Systems (HEMS), they were overseas playing a major role as Energy Continuity Systems (ECS) in Japan after the devastating Fukushima disaster disabled forty-eight of Japan’s fifty nuclear reactors. Rolling blackouts and sporadic outages plagued the Land of the Rising Sun years after the monstrous earthquake rocked the world, instilling a heightened awareness of energy reliability and a towering demand for homes equipped with HEMS.
Even though the demand for HEMS significantly increased in the shadow of that major natural disaster, years later this promising emerging technology is still finding its place in the Northeast’s herculean efforts to capture all cost-effective energy efficiency. Like most emerging technologies, the true potential of HEMS is still largely unknown. Many barriers stand in the way of widespread uptake such as an uncertain ROI, due to the versatility of HEMS products and usages, and a pervasive lack of consumer awareness.
HEMS are projected to be big; according to a report from Navigant Research, global revenue from HEMS products and services is expected to grow from $846 million annually in 2013 to $2.4 billion in 2023. To understand how this industry can grow, we deconstructed the phrase word for word and pieced it back together again to grasp the current scenario of the HEMS market.
Does the average energy consumer want these systems in their home? Well, in order to answer this question, they should understand the full extent of what a Home Energy Management System is and what they aim to do. There are many forms of HEMS in the market that can be matched to a wide array of consumer preferences. Their uses are so diverse that greentechmedia has best defined HEMS as, “encompassing any product or service that monitors, controls, or analyzes energy in the home.” This definition includes uses such as residential utility demand response programs, home automation services, personal energy management, data analysis and visualization, auditing, and related security services. The dual benefit of owning a HEMS system is that it can manage energy profiles to reduce peak demand while simultaneously reducing consumers’ electric bills, a personal and communal win-win.
It’s no surprise that this is the key word for those of us involved in energy efficiency. The average consumer is expected to save between 10%-20% on their energy bill when they use a HEMS. HEMS are a great efficiency opportunity, but to-date there hasn't been much uptake due to the upfront costs of the technology itself along with a whole host of accompanying tools like home energy displays (HEDs), smart appliances, and sensors. This is a potential role for efficiency program administrators (and their incentives) to play to enable market animation, especially because the connected home could become a large part of consumers’ lives. It is important for program administrators to collaborate with the industry and fully understand these energy saving trends and integrate them into program design.
The ability of HEMS to manage and monitor the energy usage of a multitude of devices is both part of the draw for home owners and a barrier for energy efficiency programs in identifying the greatest program opportunities and savings assumptions. Some companies are focusing on the implications HEMS have for altering behavior while others harp on the direct energy management aspects. While the management of devices connected to HEMS is incredibly important, it is becoming clear that there is no single right answer for how energy should be managed (much to an evaluator’s chagrin).
Finally, a HEMS is only as valuable as the devices it controls. While smart thermostats controlling HVAC equipment are the most common type of system, a true HEMS will control more than just HVAC. ENERGYSTAR has already added recognition for connected functionality of a range of products including refrigerators, freezers, clothes washers, clothes dryers, room air conditioners, pool pumps, dishwashers, and in the works for lighting and climate controls; the number of products migrating into the home energy management eco-system are plentiful and growing.
HEMS technology can be used to keep the lights on in moments of desperation and can also dig down into deep household efficiency savings. As such, NEEP leads a working group that brings together efficiency leaders and manufacturers to focus on HEMS and all of their energy efficiency implications. To bring about consistency in claimed energy savings from HEMS technology, NEEP is undertaking a research project to analyze these potentials. For more information on NEEP’s work on HEMS’s visit our webpage.