How much are typical Americans willing to pay for technology that allows them to monitor and manage their home energy usage?
About $48 on average, according to a recent survey by Penn, Schoen & Berland Associates and Burson-Marsteller.
That could present challenges to companies seeking to sell in-home energy management systems directly to homeowners, given that most of those systems are pricier than that.
It could also lend ammunition to those that argue that utilities need to pay for or offer incentives for such in-home energy management systems – or, alternatively, that they need to be folded into other home systems, like telecommunications or security systems, to be commercially viable (see iControl Gets $23M For Home Security, Home Energy Management and The Telco Home Energy Invasion).
According to the 2009 Green Power Progress Survey released Monday, $48 is the average price American will pay in a one-time fee for installation of hardware to facilitate the "benefits of smart grid technology" (see slide 16 of the survey for more details).
And out of the respondents that yielded that average, a quarter weren't willing to pay anything at all, another quarter weren't willing to pay more than $25, and only 7 percent would pay more than $100.
There is another category of "green elites," or people who said they are involved in sustainability or environmental efforts, willing to pay about $70 on average, with 14 percent of them willing to pay $100 or more, the survey found.
But those people likely make up only a small percentage of the population, noted Beth Lester, a vice president at Penn, Schoen & Berland.
As for monthly fees to support those services, the typical American would pay $13 a month, with 30 percent of them unwilling to pay anything and 19 percent willing to pay more than $20. Among green elites, the average acceptable monthly fee rose to $36.
Still, the wording of the survey left unclear just what kind of functionality respondents imagined they'd be getting from the "hardware" they set a price ceiling on.
For example, Google is working on a platform called PowerMeter to read overall household energy usage information from smart meters or other devices at people's homes and present that data in web format – and it wants to give it away for free (see Lu's Google PowerMeter Update: Open APIs, More Partners Soon).
Microsoft is developing a similar web interface that it intends to be free for homeowners (see Microsoft Launches Home Energy Site, Sees Devices, Demand Management in Future).
Simply giving homeowners a view of their energy use has been shown to yield 5 percent to 10 percent reductions in energy use, though it's unclear if those reductions will hold out over the long term.
And the two IT giants are following the footsteps of a host of companies – Tendril Networks, EnergyHub, Greenbox Technology, Onzo, AlertMe, eMeter and OpenPeak, to name a few – developing in-home energy management systems aimed at being deployed in partnership with utilities rolling out smart meters to customers (see The Smart Home, Part I).
But getting more detailed energy usage information broken down by major loads such as air conditioners and appliances – not to mention providing the ability to control such loads to reduce peak power demand or save energy overall – is likely to cost quite a bit more, according to companies now supplying such technology.
For example, Control4, which makes integrated home entertainment and security systems, is coming out with an energy-specific device for $200 next year, one that includes the ability to control thermostats and lights, rather than simply see how much energy they're using.
That's a discount from the $500 and up the company charges for its overall systems, but still higher than the average price survey respondents said they'd be willing to pay for in-home energy management - one reason, perhaps, why Control4 is looking at deals with utilities, as well as direct sales to consumers, as a route into people's homes (see Control4 Gets $17.3M to Expand Home Energy Management).
Utilities and their partners working on home energy management platforms have been doing their own customer surveys to get a better sense of what customers are willing to pay for seeing and controlling their energy use.
Similar customer expectations will doubtless play a role in how major appliance makers, such as General Electric and Whirlpool, bring new "smart appliances" to market.
GE, for its part, plans to make a line of appliances that can be remotely managed to power down at customer or utility command, and expects them to cost about $10 more than traditional appliances. But it also expects that its "home energy manager" device to manage such controls will cost $200 to $250 – a price that might require utility incentives to be attractive to homeowners (see GE's Smart Appliances: Smarter with GE Home Energy Manager).
Derek Richer, director of Penn, Schoen & Berland, noted that the survey's findings went beyond the price people are willing to pay for in-home energy use.
In general, the survey indicated an overall acceptance by consumers of bearing a portion of the costs of a range of "smart grid" projects to make the nation's electricity grid more efficient, he said.
Two-thirds of respondents said today's grid wastes energy, and 63 percent supported government incentives for smart grid investments to curb that waste, the survey found.
Still, the survey indicated a "perception gap" between the cost respondents were willing to pay – about $18 a month, or a 15 percent increase, to their utility bills, on average – and the $62 per month they expected such smart grid improvements would add to their monthly power bills.
Interact with smart grid industry visionaries from North American utilities, innovative hardware and software vendors and leading industry consortiums at The Networked Grid on November 4 in San Francisco.