Home Energy Management Systems Are Poised to Have an Outsized Affect on Energy Sustainability Efforts

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The market for home energy management systems (HEMS) is poised for rapid growth over the next several years, the result of trends including the need for energy conservation and optimal use of available energy resources. It couldn’t happen at a better time, because it’s clear that HEMS use will play a crucial role in creating a more sustainable energy future.

These are some high level results I took away from a recent report by researchers at TechNavio, who forecast the HEMS market will grow to more than $2 billion by 2019, with an overall growth rate of 26.8%. According to the company’s “Global Home Energy Management Systems Market 2015–2019” report, the HEMS market comprises five products: lighting controls, self-monitoring systems and services, programmable communicating thermostats, intelligent HVAC controllers, and advanced central controllers.

Energy demand is expected to rise by 75% by 2030, says Sayani Roy, an industry analyst who works in TechNavio’s energy and engineering division. “It is essential for government as well as utilities and consumers to take a proactive approach and strategize programs and other initiatives in order to reduce energy consumption,” Roy says.

In Europe, at least, that proactive approach includes a heavy dose of HEMS. The European Union is expecting 80% of the population will be served by smart meters by 2020, says Vishur Rai, lead analyst with TechNavio. Smart meters, of course, are a key component of a comprehensive HEMS strategy – and they alone deliver a sound return on investment. As the European Commission Institute for Energy and Transport reports:

While cost estimates vary, the cost of a smart metering system averages between €200 and €250 per customer, while delivering benefits per metering point of €160 for gas and €309 for electricity along with, on average, 3% energy savings.

Consumer HEMS platforms are often offered by utilities and tied to demand response programs that reward consumers for reducing energy consumption, especially during peak energy use periods. While utilities today are in the nascent stages of implementing such systems, it’s clear they hold great promise in terms of meeting sustainability goals.

Today utilities spend about 1% of revenues on HEMS, engaging with customers through energy dashboards, utility panels and the like. “Going forward, they should be able to extract data from HEMS systems, analyze that data and see a pattern of energy consumption within a particular home,” Roy says. When the effort is expanded to an area of say, 1,000 homes, now the utility has thousands of data points to work with to get a better understanding of when the peak periods are as well as the behaviors and loads that can be managed to mitigate energy use during those periods. Such data will also help them determine how best to meet peak demands, such as by effective use of renewable or at least cleaner sources of energy, such as natural gas.

What’s more, if the average HEMS user reduces energy use by just 5%, but you have thousands of homes implementing HEMS, then the savings quickly add up. “If we extrapolate that to bigger cities, imagine the amount of power than can be saved using home energy management systems,” Roy says.

I wouldn’t be surprised if the savings in many instances are far greater than 5%. I know some users of the Schneider Electric North American Wiser demand management platform have been able to reduce their heating and cooling energy use by 20% to 25%.

And once users install a HEMS, they may well get the energy saving bug, which can lead to further sustainability efforts, such as installation of solar panels – a point made in a study by researchers at the Delft University of Technology in the Netherlands.

We are indeed in the nascent stages of HEMS but the technology could wind up being nothing short of a revolution in terms of its effect on energy sustainability.

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  • Thank you for this information concerning home energy management systems. It is interesting to learn that these systems will play a crucial role in creating a more sustainable energy future. Something to consider would be to invest in a home energy management system for a cost within your budget.

  • I feel that Home Energy Management Systems are here to stay due to their exceptional features that can save us both energy and money. Thank you for this awesome article.

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