In only a few years, the number of connected “smart” products for the home has increased exponentially as homeowners have shown more and more interest in being able to monitor and control their homes from nearly anywhere.
“The growth trend reveals that revenue is expected to hit $10 billion this year and $44 billion by 2017 globally,” said Mark Schmidt, business development manager at Ingersoll Rand — Nexia Home Intelligence. In the HVAC industry, specifically, global shipments of connected thermostats “were up 46 percent in 2013 and were expected to quadruple by 2017,” he added.
Meanwhile, manufacturers are meeting the demand by developing user- and technician-friendly products that save energy while granting remote control of a user’s home.
In the HVAC industry, “thermostats and smartphone apps have come to represent the face of automation,” said Wayne Guelfo, director, controls and automation, Johnson Controls Inc. “The York brand offers both of these products, responding to the demands of homeowners who are becoming more educated in the area of technology.”
David J. Wood, product manager, thermostats, Aprilaire, said the company’s home automation products, including the Model 8800 touchscreen thermostat, have evolved to meet the growing needs of automation customers over the past few years. “Improvements in industrial design and the user interfaces are the most noticeable changes, but these products also support an even wider set of HVAC control applications than ever before,” Wood added. “Previously, only large mansions could afford automation systems with thermostat controls. Now, smaller homes controlled by single thermostats can enjoy these benefits.”
John Peil, ColorTouch brand manager, Venstar Inc., said Wi-Fi connectivity has helped revolutionize the industry. “With the advancement of smart home devices, consumers are becoming aware that the home of the future is indeed here and possible,” he said.
Marc Tannenbaum, president of Dr. Energy Saver, said the growing popularity of home automation products is due, in part, to increased media attention. “The media coverage of Google’s purchase of Nest made this a hot topic for a period of time.”
While the home automation market is growing, the technology is improving just as quickly.
“ecobee thermostats keep getting smarter,” said ecobee spokesperson Tenille Kennedy. “ecobee introduced its first smart thermostat in 2009, allowing customers to monitor and control their heating and cooling anytime, anywhere, from a Web portal, smartphone, or tablet app. ecobee smart thermostats also provide customers with insights into how much energy your home or building is using and whether there are energy leaks present. The company is continuing to improve its design, user friendliness, and technology to improve comfort and deliver savings.”
Guelfo said the York brand of Johnson Controls “has been producing several home automation-related products for a long time.” More recently, the company introduced the York Affinity™ Residential Communicating Control with Wi-Fi®. “This control provides total system integration to ensure maximum system efficiency and comfort, and Wi-Fi allows homeowners to use a mobile device to monitor their home comfort systems when they are away from home, alerting them to potential problems and enabling them to remotely make energy-saving adjustments to system settings.”
Tom Jackson, CEO of Jackson Systems LLC, agreed technology has changed dramatically over the past few years. “With nearly 60 percent of all adults owning a smartphone, the demand for these thermostats has grown,” he said.
Gene LaNois, general manager of Nest Professional, said Nest’s products are continually improving, too. “The Nest Learning Thermostat has only gotten better over time,” he said. “It never stops learning and is constantly looking to optimize homeowners’ heating and cooling equipment. Its capabilities improve as additional products are added to the house, such as Nest Protect: Smoke + Carbon Monoxide (CO) alarm and other ‘Works with Nest’ third-party products.”
Schmidt said as technology has improved, so has ease of installation. Trane’s XL824 connected control “has a gateway inside it that makes it that much simpler for HVAC professionals to install a product they’re familiar with and be able to offer customers connectivity,” he said. “They can connect door locks and other peripheral products as you need them, or as things happen, using the Nexia platform.”
While products are getting smarter, they are also becoming more affordable. In the span of just a few years, home automation “has moved from a luxury item for a very small segment of the market to something most consumers recognize as affordable and valuable,” said Geoff Godwin, vice president of marketing, Emerson Climate Technologies Inc. In fact, according to a recent consumer survey from Emerson, “Close to 40 percent of all thermostats purchased in the past year had Wi-Fi capability, and 75 percent of people that own Wi-Fi thermostats purchased them in the past year.”
“The cost of the technology has decreased over the years, making these thermostats more affordable,” Jackson agreed.
“New technology is always more expensive,” Schmidt explained. “As adoption increases and sales increase, products will continue to get cheaper, especially with more competition in the marketplace.”
Wood said smart homes have been around for a while, but due to “reduced costs and programming improvements, accessibility to these ‘smart homes’ are finally going mainstream; smartphones are fueling this desire as users look for more things they can control from these devices, both within the home or while away.”
LaNois said home automation products are starting to come down in price. “Products like the Nest Learning Thermostat and Nest Protect are helping people stay comfortable and safe, and they are becoming accessible and affordable to more people,” he said.
Currently, “smart thermostats are a $100 million market and are projected to reach $1.4 billion by 2020,” Jackson said, adding that the most popular demographic for these devices are 25- to 34-year-old individuals with slightly higher incomes. “As the technology gets even more affordable, we think the market will open up to a wider demographic,” he said.
No Clear Standard
With so many new products flooding the home automation marketplace, it is no surprise there are numerous operating systems in use. That, some say, could be a big problem.
“Despite all of the improvements in technology and design, there is still no clear standard for all devices to communicate together,” Wood explained. “Today, control systems must act as a universal adaptor for these disparate systems. We have also seen several home automation platforms come and go in the past few years, most of which failed to attract the numbers of subscribers required to support their high operating costs. For this reason, it is important that customers understand how this upfront investment (or monthly fee) will benefit them.”
Guelfo agreed that “manufacturers need to be more agile in providing products that deliver the features homeowners are asking for, including connectivity with multiple systems using a single interface.” He added that, for now, customers seem satisfied to control home systems through individual apps.
“However, as more systems become more mobile, customers will look for a solution that offers one interface to control multiple systems,” Guelfo continued. “There is a certain amount of value derived from remote connectivity, but integrating all of the connected pieces will increase the value of all of the system components. This is the idea that 2 + 2 is greater than 4.”
Ofer Ben-Nathan, marketing and sales manager, Cool Automation, said the CoolMaster control adapter is designed to alleviate some of these issues and is compatible with, and may simply integrate with, all major brands. “This has been well recognized by home automation companies who either purchase CoolMaster directly or recommend it for their distributors and integrators everywhere as an integration solution with their controllers and HVAC.”
Peil said Venstar’s Open API is the company’s “bet that full home automation is only going to get more affordable and more ubiquitous,” he said. “With Open API, Venstar has the ability to connect completely with absolutely every home automation system currently on the market.”
Godwin said the solution to the problem, and perhaps the catalyst to the mass adoption of home automation technology, may lie in the cloud.
“I do believe consumers will ultimately want single points of contact for all their home automation items,” he said. “Today, several hub systems provide this feature, but eventually the hub will disappear and the components will connect in a cloud environment. That connection will be the tipping point for significant adoption.”
The Future of Home Automation
As technology advances and becomes more affordable, and as more and more homeowners choose to adopt home automation technology, the industry will only continue to grow at an increasingly rapid pace.
“In the past, most homeowners did not concern themselves with the technology associated with their HVAC systems and other appliances — their interest was in whether the systems worked and if they could adjust temperatures from time to time,” Guelfo said. “However, today, as they become more familiar and comfortable with the options available to them, homeowners are expressing their opinions more frequently to dealers and distributors and, through them, to manufacturers. As a result, homeowners’ ‘pull’ will drive automation features and product improvements, forcing manufacturers to respond much more quickly with products that include these features.”
Guelfo added that utility companies are showing an interest in using grid-connected home automation products to manage their energy loads. “Until recently, all they could do was manage their side of the infrastructure; now, they see the opportunity to get into individual homes to manage individual loads, as long as the homeowner allows them to. As a result, more utilities are pushing for smart thermostats and smart-grid products to better manage the production and distribution of loads as well as the demand, especially during peak times.”
Peil noted that consumers want email alerts. They want to know what’s happening with their equipment, immediately.
“With ColorTouch’s free email alerts, homeowners know as soon as there’s an issue with supply air temperatures, which can signal a potential problem with the HVAC equipment. The sooner it can be served, the better the outcome for the homeowner. Knowing early is the key. The only way to know early is to receive an alert.”
Kennedy said ecobee is bracing for significant growth in the coming years. “Navigant Research estimates that the global installed base of smart thermostats will grow from fewer than 1.4 million in 2013 to approximately 32 million by 2020. We’re at the beginning of the Internet of Things revolution — where everyday items are connecting to the Internet and can now ‘talk’ to each other instead of operating in a vacuum.”
For contractors, the future of home automation spells opportunity, but only if it’s done right.
“Contractors need to embrace the technology,” Godwin said. “Train technicians on how to install these items, and treat these items as standard offerings and not super-premium options. Homeowners still rely on contractors to lead them through the HVAC service and replacement experience, so contractors have the opportunity to make the upsell to Wi-Fi if they know the product and value it brings to the consumer.”
Jackson agreed, saying, “With the smart thermostat market projected to grow so rapidly, now is the time for HVAC contractors to get in the market and earn their share of the business.”
“This isn’t an industry that traditionally embraces change — it’s very old school,” Schmidt said. “Now, consumers are demanding the ability to be connected to all these products, and they want their HVAC dealers to better monitor them. It’s important for the industry that dealers embrace this change.”
Publication date: 8/25/2014