Residential Energy Management Seen Benefitting From Rise in Networking

Energy management won’t be a consumer-driven profit opportunity for the custom installation market anytime soon, according to panelists on “Pioneering Technologies for the Custom Integration Industry,” part of the Lifestyle Technology Summit in New York Friday.

Clients of Audio/Video Systems, a New York-area custom integrator, have cable bills “higher than my electric bill,” said Chief Operating Officer Franklin Karp, so “we haven’t seen demand for energy management just because they want to fill the green promise.” Clients aren’t asking for solar shades that work according to sun intensity, a control feature that Audio/Video Systems could accommodate if demand were there, he said. “It’s a little early for that,” Karp said. “We haven’t figured out a way to monetize that part of the business."

As panelists explored the next wave of revenue opportunities for integrators, Aaron Gutin, vice president of sales and marketing at network solution provider Access Networks, said convenience is a greater incentive for home control than energy management in his native Los Angeles area. A lot of energy management technologies including lighting control are still in their infancy and just “starting to coagulate,” Gutin said. Lacking is an easily delivered message about “five things you can do to manage energy in your house,” Gutin said. Consumers will gravitate toward automated lighting and shading but “mostly because of ease of use” rather than a desire to conserve energy, he said.

Networking is the technology many integrators are turning to, mostly out of self-preservation, panelists said. “The glue that will hold energy management together” is the home network, said Gutin, and it will become increasingly important as more customers look to connect wireless tablets and other electronics in the home, he said. As connectivity becomes more standard on projects, energy management “becomes more a reality as the puzzle pieces fall into place,” he said. Recurring revenue opportunities will present themselves on an individual basis and according to geography, he said. Integrators in parts of the country with a high number of vacation homes have a better opportunity to develop a program where they can monitor and visit homes for a regular fee, he said.

Energy management may simply evolve as a “de facto standard” from the manufacturing side, said Gutin. He likened the scenario to anti-lock brakes, which first appeared in jet airplanes and then trickled down to a mainstream feature in consumer vehicles. “Consumers didn’t ask for them,” Gutin said, “but manufacturers saw an opportunity to extend something from another industry and now virtually every car has them.” Manufacturers of control and automation systems for commercial markets have to employ sustainable features as part of business today, and if they push those features into residential systems “they become fact,” Gutin said.

At Audio/Video Systems, providing robust networking has become the most essential part of the business, Karp said. Although networking is largely invisible “and not the most lucrative” part of the business, it’s essential to promote and try to monetize, he said. Enterprise-grade networks are “the most important thing we have in our business because every product we're installing has an IP address,” Karp said. Maintaining that network is critical because “we're on call 24/7 and no matter what happens in the home, we get the call anyway,” he said. Homeowners may balk initially at the cost for a powerful, secure network, but when he assures clients that they want to duplicate in their homes the secure and reliable network they have at the office, they “get it,” he said.

Security also trumps energy management as a consumer-driven incentive for home control, panelists said. Recent widespread hacking events on the Sony PlayStation and Sega gaming networks have put personal cybersecurity in the headlines, which is likely to give impetus to homeowners to invest in a higher level of home security, he said. Hagai Feiner, president of Access Networks, said his company has seen greater demand from customers to segment their home’s Internet access. Guests may have access only to the Internet “and maybe a printer” but not to anything else on the home network, he said. Homeowners “are very much aware that the cybersecurity risk is not just in the outside world but with people who visit their home, and they'd like to limit exposure,” Feiner said. On larger projects, corporate and movie studio executives request that even estate managers are separated from the private network. Access Networks creates digital partitions so that individuals can function on the network “but not see each other.” The integrator is increasingly becoming the digital centerpoint of the project and being held accountable for security as well, he said. This will lead to more cameras and sensors in the home being integrated with automation systems so that the homeowner “can see everything wherever they are.” There’s definitely a trend of “everything getting connected,” he said.

Those connections will tie back into the TV, one of the building blocks of the custom business, said Joe Bingochea, vice president of product management and marketing for Channel Master. He noted that ISPs including Time Warner Cable and Comcast are beginning to deploy security services in a recurring-revenue model and said “it’s important for integrators to jump in and not let those operators take the business.” Integrators can add value to their margin-strapped video business with integrated energy management and service, he said.