Recent announcements illustrate that battle lines are forming over who, what, and how home energy management will be offered to consumers. Demand-responsive homes that throttle their electricity consumption based on the real-time generation capacity are key to the smart grid vision of distributed renewable and PHEVs. The big question is: who will entice pesky consumers into “behavior change”, and be able to make money doing it?

Conventional wisdom is that consumers will link their freshly-installed smart meters to Home Area Network (HAN) devices obtained directly or indirectly from their friendly neighborhood utility. Last month, Cisco unveiled their sleek Home Energy Controller device, with netbook-like capabilities such as a color touch-panel display, 1.1 GHz Atom CPU, and high-end Ethernet, Wi-Fi, ZigBee and ERT meter radio interfaces. More importantly, Cisco also offers utilities extensive cloud-based management services to administer these (and partner) devices, addressing a key utility concern. Signs of general market immaturity abound: Cisco did not announce pricing (a netbook is cheap as a computer, but not as an in-home display), the solution is only being deployed in trials (Duke Energy’s 100 home pilot is the only announced user), and installation, for now, requires a truck roll. Though slick and technically complete, this is similar to trials over the last 2-3 years using technology from HAN veteran Tendril, home automation expert Control4, and others.

Alternatively, Verizon continues to talk-up its still-emerging plans to use thousands of installed FiOS broadband routers to offer home energy management services. Carriers see energy as the entre for comprehensive home automation services, part of the eternal quest for greater ARPU (Average Revenue per User). ADT is planning a similar assault this year using iControl’s technology. Even solar start-up Enphase introduced a smart thermostat, arguing that solar installers are a perfectly good channel to consumers. These systems do not tie into utility programs (or their smart meters), but could leverage these as PUCs (such as California) require real-time access to smart meter data by 3rd-parties if consumers request.

Whether supplied by utilities or within carrier quadruple-play services, do consumers really want any of this? A forthcoming Pike Research consumer survey indicates they do, but are uncertain how much they would pay, and are most open to utilities as suppliers (watch for upcoming details).

The picture gets even cloudier if we view this as just the latest attempt to bring home automation into the mainstream. The robust and profitable high-end home automation market (10,000+ square foot homes) has spawned many a technology “Donner Party” that tried crossing from home control toys (think X-10 from RadioShack) to full automation services for middle-American homes. Also, while energy management features may help consumers save, it is not clear utilities can leverage them as official demand response capacity (technically or regulatory). Sooner or later, critical infrastructure cyber-security experts, who just shake their heads at cloud-based services in the smart grid, will need to be accommodated (warning – Congress is listening to them).

On the positive side, the larger smart grid stars are aligned, and will likely drive a real home energy management opportunity. And as in previous market transformations, the requisite expertise and investment is being applied. Pike Research has embarked on expanded research into this area, where we’ll attempt to anticipate the likely size and outcome of the harvest.

Article by Bob Gohn, appearing courtesy Matter Network.