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Utilities Need to Act Fast to Join the Smart Home Revolution

Companies in the technology, telecommunications, security, and retail industries have been offering smart home devices and services — such as home security, lighting control, and temperature control — for years. But their motivation isn’t helping customers save energy; it’s getting them to buy more devices and accompanying services. While these offerings may in fact help customers save money on their energy bills, utilities are in a unique position to advise customers about how to use them to best advantage specifically for that purpose. But, to have this kind of impact, they need to act fast to get into a highly competitive market.

Utilities Add Value

Of course, other types of companies can offer power-related services, but utilities can wrap such services into a value-added package, helping customers understand their usage habits and reduce their costs. For example, some energy companies are using apps to help customers understand their usage per room. Others can help them understand usage per appliance. Such a granular approach puts utility companies in the role of cooperative energy advisor, not just energy provider.

Utilities may need to team up with technology partners to offer a full, competitive selection. However, these partnerships can be invisible to customers, who will be able to create a unified environment with devices that pair well together. Customers may even be more willing to purchase smart home products, services, and systems from their utility if the trust factor is already high.

Even if utilities decide not to offer smart home products and services, they can still serve as an energy partner to customers by providing advice about and helping customers integrate appropriate smart home choices.

Ramping Up

Serving as an energy advisor by offering smart home services can enable utilities to increase revenue and decrease customer attrition. They can start by trying out a few products and services, and grow the program based on initial results.

Customers may also need to start small, with perhaps one smart device. Often the technology that makes sense to begin with is one that is operated by a voice assistant, which can be connected to a smart thermostat. Marty Swant, writing for Adweek, states, “According to Jeff Hamel, head of energy partnerships at Nest…people with a smart thermostat connected to their Google Assistant are interacting with their energy usage more and saving between 10 and 15 percent on their bills.”

In an article for the Smart Electric Power Alliance (SEPA), author Jennifer Szaro presents tips for utilities from SEPA board member Seth Frader-Thompson:

Get the word out. Whether through targeted emails, social media and search advertising, bill inserts or even roadside billboards, utilities need to get the programs in front of the majority of their customers.

Make it easy. Customer representatives must be trained so they are well informed about these program offerings and encourage participant enrollment.

Give customers choices. Utilities should design their programs to give customers straightforward access to a wide range of options — both in device class and brand name.

Lots of Competition

Utilities interested in providing smart home products and services should know they will face considerable competition. Here is a small sampling of some key players currently in the market.  

  • Amazon – provider of Echo Plus smart home hub, which is capable of controlling thermostats, lights, garage doors, locks, and more
  • Google – provider of Nest smart home system that includes thermostats, cameras, doorbells, alarms, and locks
  • Pulse – provider of Loxone Smart Home, a home automation system that controls temperature, lighting, blinds, windows, doors, cameras, appliances, and more
  • Schneider Electric – provider of Wiser smart hub, which controls lights, temperature, shutters, and energy use
  • Xfinity – provider of Xfinity Home app, which controls security system, thermostat, and lights

Utilities that want to act should do so as soon as possible. Szaro observes, “If utilities choose not to take the lead, others such as third-party software and hardware providers may jump at the chance to smooth the way. The hope is that utilities and third parties will opt to work together collaboratively to develop optimal solutions that reduce duplication of effort and provide benefits for customers and the grid.”   

Image credit: ID 104538214 © Prasit Rodphan |

Karen Marcus's picture

Thank Karen for the Post!

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Benoit Marcoux's picture
Benoit Marcoux on October 17, 2018

I do not understand what is really suggested here. For instance, providing a choice of device and brands just plays into Amazon/Ecobee and Google/Nest playbooks. Besides getting ancillary device sale revenue, what is in it for utilities? What should they do?

Karen Marcus's picture
Karen Marcus on November 9, 2018

The ability to provide customers with detailed information about smart home options gives utilities an opportunity to engage with them in more personalized ways, improving their competitive advantage.

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