Home energy management yet to find traction, says Pike Research

Demand for home energy management (HEM) services remains tepid, according to Pike Research, which expects the number of subscribers to HEM services in North America to reach nearly 900,000 by 2020.

HEM services are intended to help consumers lower or more efficiently control energy consumption – and thereby save money – and broadband service providers have increasingly been looking to add them to their home automation or home security packages.

Demand for home energy management (HEM) services remains tepid, according to Pike Research, which expects the number of subscribers to HEM services in North America to reach nearly 900,000 by 2020.

HEM services are intended to help consumers lower or more efficiently control energy consumption – and thereby save money – and broadband service providers have increasingly been looking to add them to their home automation or home security packages.

“This nascent market has yet to find real traction among consumers even though market drivers do exist,” said senior research analyst Neil Strother. “Consumers’ desire to reduce their monthly energy bills, new-home construction, and home remodeling present opportunities to install the necessary hardware, and the increasing competition among BSPs in this space demonstrates some market validation. BSPs, however, will need to lower barriers in order to maximize this somewhat limited opportunity.”

The barriers are numerous, according to Pike Research, and include the high cost of HEM hardware; recurring service fees; contracts that entail multi-year commitments; uncertain returns on investment for consumers; energy costs that, for the moment, are relatively low and unstable; a lack of technology standards; a crowded, confusing market; and lukewarm utility support.

In a survey conducted by the market-research company, 63% of consumers said they were interested in HEM services, but most were unaware that broadband service providers offer them.