I study HEMS solutions and always ask the HEMS manufacturers about the support model.  There is remarkable unanimity in their assertions that the utilities will take the first support calls – for HEMS web portal software and for IHDs.  The HEMS providers are confident that their solutions are so easy to use that support is quantified as a nominal increase in support calls.  Some of them go to great pains to develop friendly user interfaces.  But I have marketed, sold, and deployed many software applications in my career, and what is “a nominal increase in support calls” to a vendor may be dramatic increases in call volumes to utility customer contact centers.    

Regardless of the success of the introduction of a HEMS solution and associated IHDs, if the support model is inadequate, the end result will be frustrated ratepayers, lagging participation in crucial Demand Response and other energy conservation and energy efficiency programs, and more utility time and expense to fix these problems. 

Utilities that offer HEMS solutions to their customers need to include software and hardware support of the HEMS solution and IHDs into their Consumer Enlightenment Model.  Bring in consulting professionals with experience in contact centers, software support, and emerging technology introductions who are knowledgeable about Demand Response and Energy Efficiency programs.  Work with them to develop a fully integrated Consumer Enlightenment Model that aligns with utility objectives to reduce overall energy use during peak and non-peak times and manages not only the introduction, but the ongoing support of visible, disruptive, and extremely important HEMS solutions and their IHDs. 

Feds Step Up Enforcement of Appliance Reporting Standards

Energy efficiency was proclaimed to be “sexy” by President Obama just last week, and the days of lax enforcement of energy efficiency standards are thankfully at an end.  The Department of Energy (DOE) recently announced that January 8, 2010, is the deadline for manufacturers of certain residential products to submit accurate certification reports and compliance statements regarding energy efficiency.  A 30 day grace period lets the slackers correct their non-compliance without penalty. 

After January 8th, the DOE will begin enforcing these reporting requirements, including leveling civil penalties or fines for non-compliance. This covers reporting and certification requirements – not the actual energy efficiency standards, which are already subject to scrutiny by DOE.  The requirements include a certification report for each basic appliance model covered by the energy standards, along with a signed compliance statement.  You can access the DOE press release and fact sheet, and for even more info, here is the Web site for DOE’s Appliances and Commercial Equipment Standards Program.   To all the appliance manufacturers that have been playing by the rules all along, kudos to you.  To those manufacturers who treated the rules cavalierly, the playing field just got leveled.

HEMS solutions usually include some sort of In-Home Display (IHD) that communicates information that ranges from current electricity rates, home electricity consumption rates, and what I term “home operations metrics” like temperature and security status. These IHDs can be wall-mounted displays or standalone, battery-operated wireless displays, or even visual devices that simply glow a different color to indicate home consumption or real-time tariff rates.

In the current electrical grid, the utility’s relationship with a residential ratepayer ends at the meter, affixed to the outside of a home. Bills arrive after the fact – at a minimum a month after your electricity use. HEMS and IHDs completely disrupt this consumer engagement model, and offer the opportunity for utilities to extend their relationship inside the home with much richer content and real-time data. True, utilities have websites that consumers can visit, but this information is relatively static.

Smart Grid-enabled HEMS solutions can deliver information that residential users would find compelling – such as real-time billing information mentioned above, tailored suggestions about how to trim their electricity bills, offers for participation in demand response programs to reduce rates, and more. This information empowers consumers to make educated decisions in real-time about how to manage their electricity consumption. That’s the good news.

The bad news is that, operationally and culturally, utilities are not accustomed to selling to residential end users. They don’t inhabit a competitive world where they must fight for mindshare and market share. If you look at the take rate for utilities’ consumers to sign up for electronic billing as an indicator of their selling capabilities, it is abysmal. Only 17% of all residential utility customers have enrolled in electronic billing. In comparison, 40% of telecom customers have electronic billing. Clearly, there’s a problem in utility outreach and education to sell consumers on a program that has solid environmental and convenience benefits.

If utilities have low success rates in getting people to enroll in simple programs like electronic billing, then there are real challenges in communicating complex and layered messages about the benefits of HEMS solutions and associated IHDs. As I noted in last week’s blog about PG&E’s rollout of smart meters, residential end users will have the opportunity to have a very visible and very disruptive technology introduced in their homes. If it’s done well, not only do the utility rate payers benefit, but overall we all benefit from fast adoption of Smart Grid solutions. However, technology rollouts that result in confusion, opposition, and lawsuits have negative impacts on everyone.

Utilities are depending on HEMS solutions to enable widespread participation in demand response and energy reduction programs. The stakes couldn’t be higher to plan and conduct effective rollouts of these HEMS applications, starting with clear messaging about the benefits of HEMS solutions to average residential customers. Not every consumer embraces change – especially when we have all been conditioned to regard electricity as a cheap and plentiful commodity that doesn’t require much attention on our part. However, we can be educated to welcome changes such as smart meters and HEMS solutions, as some utilities have successfully demonstrated.
HEMS rollouts must clearly articulate the benefits to end users – what’s in it for them, what’s required of them, how to get more information, how to get support when things break, and examples of what the solution looks like and options for IHDs. A successful HEMS rollout requires a sophisticated sales and marketing strategy. Next week’s blog will explore some of the key tactics in a successful strategy.

Flat Panel TVs Get Energy Efficiency Standards in California
Break out the Champagne for the bold decision by the California Energy Commission (CEC) in approving new energy efficiency standards for TV sets sold in California!
Recent blogs (see archives: October 12th and 26th, November 2nd and 9th) covered the brouhaha that the CEA and some TV manufacturers created with the usual scare tactics about job loss, economic disaster to businesses, and all the other assorted ills that have been projected with every previous CEC energy efficiency standard. Fortunately, the CEC knows from actual experience that these standards improve economic conditions – for California consumers who will enjoy reduced operating costs (i.e. electricity bills). In energy efficiency matters, other states often adopt the CEC rules, so here’s hoping that this positive trend to reduce energy consumption continues across the nation.