Consumers are becoming increasingly connected, as are the products in their homes. Utilities and retail energy providers use energy monitoring services to engage customers. Smart product owners and intenders show interest in energy management capabilities, and consumers are increasingly aware of the value of reducing home energy use.

In Q2 2015, 16% of all U.S. broadband households owned one or more smart home devices, many of which offer energy management capabilities and associated value-added services. Energy management features are not the main reason consumers are interested in smart home devices. However, consumers continue to report that these features are an important value-add to device functionality.

Parks Associates tested the appeal for three energy and product monitoring services:

• An energy monitoring service that tells the customer how much energy the home uses each day, how much energy is used by each major appliance, when usage is high, and how to improve energy efficiency.
• An appliance monitoring service that automatically adjusts appliances to minimize energy use and sends alerts when appliances are not functioning properly or are likely to stop working.
• A heating and air conditioning monitoring service that automatically adjusts thermostat settings to minimize energy use, notifies the customer when filters need to be replaced, and alerts the customer when heating and cooling systems are not functioning properly or are likely to stop working.

One-quarter of U.S. broadband households reported that each of these value-added services is very appealing. While these services can help retain customers, they can also be a source of revenue for utilities, smart device manufacturers, or smart home service providers. 

Typically, consumers report higher appeal of a product or service before pricing is introduced. For value-added monitoring services, the opposite is true. Over 50% of U.S. broadband households are likely to subscribe to each monitoring service and pay $2.99 monthly. Over one-quarter of U.S. broadband households are willing to pay $9.99 for each service.

The close rate of product and service offerings is much higher when a customer already has a relationship with a company. Utilities, therefore, have the opportunity to bring new services to market. Appliance monitoring or service contracts, security services, home warranty services, and solar services are all opportunities utilities can explore to expand revenues as well as customer relationships.

For more information on this research, see Parks Associates' report Winning Smart Home Strategies for Energy Management.

Parks Associates will address the smart home, IoT, and energy management market at the seventh-annual Smart Energy Summit, February 22-24, in Austin, Texas. For more information, visit www.ses2016.com. 

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