29 Aug 2016
Advances in technology and the convenience of automated devices are enabling the growth of the smart home.
Once only the domain of science fiction, connected home technologies including solar PV, batteries, security systems and kitchen appliances are now becoming commonplace with uptake increasing as costs fall and consumer interest grows.
By 2022, a typical family home in a developed market is likely to contain more than 500 smart devices, according to global technology research business Gartner Inc.
Macquarie Energy Leasing Global Head John Wilson says as digitalisation becomes a major driver in the world of energy, smart homes are a logical way to achieve efficient, convenient and tailored use of power.
“Energy in recent years has become a more expensive commodity,” Wilson says.
“A smart home allows for, quite literally, a smarter use of energy, more intelligent use of it, more independence and cross-use of technology.”
The Asia Pacific region is tipped to be the biggest growth market for smart homes in coming years, with new residential developments and infrastructure driving demand.
The uptake of the smart home is set to rise dramatically over the next few years, with the global smart homes market forecast to increase from $US46.7 billion in 2015 to $US121.73 billion in 2022, according to international market research company Markets and Markets.
Smart homes include a wide range of features encompassing onsite generation such as solar PV, local energy storage (batteries), appliances, lighting, heating and cooling and entertainment and security systems which can communicate with each other and be controlled remotely via smartphones and the internet. Efforts to control energy costs and a focus on lowering carbon emissions have helped drive the emergence of the smart home.
Advances in home security and entertainment along with growth in the market in the “internet of things” - the term given to the ever-expanding pool of everyday items that have network connectivity - have also fuelled interest.
The Asia Pacific region is tipped to be the biggest growth market for smart homes in coming years, with new residential developments and infrastructure driving demand. In the US and Canada, the importance of personal and home security is listed by 90 per cent of consumers as one of the top reasons to install smart home technology, according to a 2015 report on the smart home published by Icontrol Networks.
In Australia, the emergence of the smart home has been gradual, but the growth of smart meters, which are being rolled out in Australia’s eastern states, is expected to increase uptake.
Smart meters are digital devices that capture customers’ electricity usage in 30 minute intervals, producing rich data and insights that can be made available to the end user and the industry. This data can benefit customers through better visibility and control of their electricity use, and help with the planning and deployment of capital for infrastructure upgrades. In the UK, Macquarie is a leading provider of smart meters, which has set a target for all homes to have a smart meter by 2020. The initiative aims to reduce carbon emissions by allowing consumers to monitor how much energy they are using at any given time and manage their consumption more efficiently.
Australia has not mandated the use of smart meters, with the exception of Victoria where the roll out of smart meters is nearly complete. The market-led rollout of meters forms part of the National Electricity Market’s “power of choice” framework, which aims to give consumers more options and choice in accessing the tools that can help them manage their usage. According to Origin Energy CEO of Energy Markets Frank Calabria, metering as a consumer proposition creates a better experience.
“Smart meters help facilitate the growth of the smart home, and for those customers who choose this technology, there are real benefits on offer immediately,” Calabria says.
All new homes, as well as premises requiring a replacement meter, will have smart meters installed in future.
“We think this is going to be a market of eight to 10 million smart meters over the next five to 10 years,” Wilson says, with adoption of the technology expected to bring major changes in the energy industry for retailers and consumers, which will lead to more flexible networks and may result in lower bills.
“And we’re looking forward to working with companies, such as Origin Energy, to help facilitate this change,” he adds.
As consumers adapt to a market with more readily available information, Wilson says smart meters will contribute to the take-up of smart home appliances such as air-conditioners, lighting, pool cleaners and dishwashers that consumers can program to switch on at times that suit them, including when power is cheapest.
“If you look at the smart meter as a gateway into the home, you can potentially connect it to any smart device,” he explains.
Learn more about Macquarie’s energy leasing business.