Microsoft just killed off its Home Energy Management product, Hohm, because of less-than-overwhelming response. The software giant had signaled that Hohm was dead in March and we covered it here.
This comes a week after Google killed its version of same, the Powermeter, once touted by Google's astronaut-in-residence.
What does this mean?
Homes consume approximately 20 percent of all the energy in the U.S. and a good portion of that power is consumed inefficiently. Lights get left on, heaters warm homes when the family is on vacation, etc. What if a magic box could take the place of an angry father yelling, "Turn your lights off!"
Unfortunately, angry fathers perform that service for free while home energy management systems can cost a few hundred dollars to install and take a few years to pay themselves off. Few consumers will spend $300 on something that cuts their bills by $100 a year. (The average monthly American's energy bill -- not just electricity -- is in the $150 to $200 range. The average electric bill is about $100.)
Let's take a survey. Does the average American want to spend several hours a week and several hundred dollars to analyze their energy usage?
And here are the survey results. The answer is:
(Survey sample size was one: the author.)
Are consumers ever going to get interested in this activity?
VCs still believe they will. Intel Capital, Kleiner Perkins, Comcast Ventures, and Rogers Communications have invested more than $100 million in startup iControl, a home automation and energy management firm. That firm joins a long list of energy dashboard and home energy management startups, including Tendril, Control4, Onzo, Passiv Systems, Energy Hub, etc. Maybe the ex-Apple folks at Nest Labs can bring some consumer allure to this less-than-enthralling application.
IControl does combine HAN functionality with security services; that might help to defray costs. Tendril has pulled in investments from both General Electric and Siemens, two enemies in the wild, and will begin large-scale HAN rollouts later this year, a first in the world.
I would suggest that these high-involvement products are going to have a challenging time of it. Do they sell directly to the consumer? Do they attempt to work with utilities? What is their real value proposition? Who pays?
I would further suggest that "light-touch" approaches like OPower's hardware-free behavior modification or Ecofactor's automatic thermostat-only system stand a better chance of avoiding a short MTTKD. 'MTTKD' is John Steinberg, CEO of Ecofactor's term, which stands for 'mean time to kitchen drawer.' Home energy dashboards tend to be exciting for the first month, tolerated the second, and doomed to be ignored after that. Even coupons might stand a better chance than complicated hardware.
The need for networking will likely decline with the proliferation of efficient appliances, programmable thermostats, and behavioral programs like those from Opower that don't require hardware. As Vinod Khosla has observed, you don't need a smart, networked air conditioner if the new, more efficient air conditioner consumes 20 percent of the old networked unit.
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Michael Kanellos contributed to this article.