Data analytics will power the smart home, according to Paige Leuschner, a research analyst at Navigant Research. At Smart Summit London, she told the audience how this will happen, as well some of the opportunities and challenges for data analytics posed by the energy cloud.
The energy cloud is a term that Navigant Research seemingly coined in 2015 in its white paper of the same name. It is defined as a landscape of energy grid architecture that is different to the current model of hub and spoke architecture. The shift to the new landscape will take place as a result of technical, commercial, environmental and regulatory changes. Leuschner explained that data analytics is a fundamentally enabling technology of the energy cloud. She gave an embellished description of it as the transition from centralised generation and traditional transmission and distribution infrastructure to two-way power flows with distributed energy sources, a digitally-enabled grid with more intelligent grid architecture. “A lot of that is powered by data analytics which can tell us more about what’s going on in the grid and provide insights for improving it,” said Leuschner.
She said this transition will affect the home by turning it from an individual building that feeds off the grid into a dynamic and flexible asset that operates within it, with power generated by distributed energy sources in the home being fed back into the grid, resulting in more grid reliability. Leuschner said that what is making the home into a dynamic grid asset is a proliferation of connected devices and the data emitting from them. She imagines that, in the future, advanced applications will be able to integrate with the distributed energy sources. That integration could monitor energy sources like solar panels and feed that energy back into the grid, as well as enhance home security systems with knowledge about energy usage and patterns.
Leuschner has been told by vendors that, “we are only beginning to scratch the surface of the opportunity data has to offer.” They have said there is scope to improve customer engagement and satisfaction by providing information about personalised energy consumption and suggesting ways to reduce it and thus lower energy bills. Some vendors have spoken to her about “non-intrusive load monitoring” which can tell how much energy is consumed by individual energy appliances. There are also database services that monitor performance and, for example, can inform an occupant that an appliance like a boiler is about to fail. With more devices, more data and relatively high penetration of in-home networks driving the market, companies are recognising the opportunities in the data and starting to introduce new value-added services.
However, there are some challenges to the expansion of this market including data privacy and data security. Leuschner herself fell victim to a data breach when her social security number was leaked in a recent hack. Another obstacle is a lack of understanding of data, with many companies not knowing what to do with it, or even if it is worth processing. Managing data is another expense, so there might be a case for charging customers a monthly fee in the future to support applications. There is also the issue of data ownership and regulations that Leuschner argued could hamper innovation. She said: “In European countries, there is a lot more sensitivity around protecting consumer data, which is great, but it means there are vendors that won’t be able to use the data to create new and innovative applications.”
Despite these challenges, Navigant expects smart home data analytics revenue to increase from $1.3 billion in 2017 to $11 billion in 2026 at a growth rate of 27%. According to Leuschner, a lot of that revenue will come from the analytics that support connected devices. “We expect direct-to-consumer services to grow the most, as vendors discover new opportunities to monetise data. As hardware becomes less profitable and data analytics becomes more of a cost to companies, we expect B2B software to grow pretty consistently, as companies who want to get involved in the data space, but don’t specialise, go to software providers to manage and process the data.”
(John Hutchins, head of connected home for EDF Energy bluelab, is speaking at this year's DataIQ Future. For more information, go here.)