Home automation represents a huge opportunity for energy utilities, allowing them to pursue new business models, according to new research by GlobalData.
Its latest report, Thematic Research: Automated Home and Utilities, says that the automated home market was worth more than $23bn (£18.6bn) in 2018 and is expected to reach $75bn (£60.7bn) by 2025, growing at a compound annual rate of 18%.
Utility-linked smart thermostats alone are predicted to account for over one third (36%) of the automated home market by the end of the forecast period.
Utilities have gradually moved from passively supplying electricity to consumers to innovating new business avenues such as home rooftop solar and storage, said Harshavardhan Reddy Nagatham, senior power analyst at GlobalData. Now, the automated home is a new market that a few utilities have started to explore.
The biggest advantage is that utilities have a large existing base of customers and don’t need to spend capital and resources on customer acquisition.
“There are several routes utilities can take to enter the home automation market, but the most efficient one is forming strategic partnerships with home automation device makers, as this can prove to be a mutually beneficial arrangement for both parties involved,” Nagatham explained. “The device makers get access to the huge customer base of the utility, and the utility, through the use of these devices by the customers, gains access to the consumption related data of the customers.”
Utilities have already tested the waters by supplying selected customers with smart thermostats and energy management systems, which are integrated with the household’s smart meter and connected to the utility.
Nagatham added: “Players such as smart home device manufacturers and service providers would be keen to partner with utilities in order to not only reach their existing customer base, but also use the utilities’ historic smart meter data in order to better program or calibrate their devices.”
Read our Next-generation connectivity report to learn more about how new technologies and next-generation internet connectivity will impact the energy and utilities sector.
