Control4 Seeks Utilities to Partner On Future Home Automation Growth

With new home construction still in the doldrums and well off its peak of 1.8 million housing starts in 2006, according to the National Association of Home Builders, the smart grid is offering home automation company Control4 new life and a foot in the door to a segment of customers the company hasn’t typically reached, Control4 President Glen Mella told us. “We believe utilities represent one channel for deploying a technology footprint into a large number of homes,” he said, saying 80 percent of the company’s business goes through custom installation and retail channels.

While Mella doesn’t see the current business mix “changing overnight,” he said it could change over time, and the company has identified a potential market of three to six million customers through programs with utilities. Smart grid pilot deals like the one Control4 inked with AEP Ohio earlier this month for 1,000 of the company’s EMS 100 energy management systems offer an opportunity for “a large number of customers” to become familiar with Control4’s energy management technology and software interfaces, he said.

The company has its sights set on residual sales once a Control4 home controller is in a utility customer’s home. “It’s not a leap of the imagination to think some percentage of consumers would then come to the Control4 dealer channels and say, ‘what else can I hook up to this?'” he said. Possibilities would include controlling lights, multiple thermostats or other systems they could put in energy-conservation modes that are outside the scope of the pilot utility programs. “Our vision over time is that the technology becomes increasingly relevant to consumers,” he said.

Bringing installed home automation mainstream requires a different pricing model from what the category has seen in the past. Piggybacking off of home theater, the home automation market gained traction “with more affluent customers,” Mella said. In smart meter programs, consumers typically don’t foot the bill for the technology. Some utilities are receiving government grant money for projects, Mella said, and in other instances a rate case is made to public utility commissions.

The economics for smart grid homeowner technology are “quite a bit less” than what people have historically paid for home controllers and media management, Mella said. He estimated the cost of energy management technology to the utilities to be in the $200-$250 range per home. “This is not thousands of dollars of technology that utilities are purchasing for trial homes,” he said. “It’s quite a bit less than that.” Depending on the program, there might be a “minor” monthly monitoring or management fee that consumers can opt in or out of, he said. Programs vary according to utility, he said. Some will be ongoing throughout the year, he said, and some will be accentuated in summer months “when the need is the greatest.” Through utility deployments alone, Control4 expects to reach 50,000 homes this year, Mella said.

Participating homeowners will have a choice about how much control they want to cede to the utility during demand times, said Susan Cashen, Control4 marketing vice president. A beep on the Control4 interface might indicate a demand response message from the utility asking the customer to reduce energy consumption in the home, she said. “The consumer has the choice to automatically say yes or no or to override the request,” she said: “The consumer is in charge.” She cited an “atta boy” message that comes up on a display showing consumers how much money they've saved in a particular month based on energy management choices they've made.

Control4 plans to have a presence with Best Buy, and Magnolia COO Steve Delp was part of a home automation panel Control4 spearheaded at CES. “Best Buy intends to be a partner with us in energy management,” Mella said, and “initiatives are under way” at Best Buy for the retailer to be both technology and service provider of Control4 home automation products, he said. A query to Best Buy corporate communications about Best Buy’s plans weren’t answered by our deadline.

Control4 also announced this month it signed a reseller agreement with smart grid solutions provider Silver Spring Networks, and together the companies offer an end-to-end home area network solution it described as a “robust, end-to-end smart grid architecture.” Control4’s EC-100 has access to data from Silver Springs Networks’ UtilityIQ demand response management application and intelligent end-point. Together, they offer consumers “complete energy information in real time,” according to Silver Spring.