The “home of the future” is nearly here. Boulder, Colo.-based Pike Research forecasts that appliances linked to the smart grid will be attractive to early adopters by 2013—and will represent a $26.1 billion annual global market by 2019.
The smart appliance market, which includes smart grid-connected refrigerators, clothes washers and dryers, water heaters, and dishwashers, is on the cusp of transitioning from the development state to commercialization and growth, according to the Pike report, Smart Appliances.
Appliance manufacturers have been working with utilities and other technology vendors to test and pilot various capabilities enabled by smart appliances. From a technology perspective, market players have demonstrated that it is relatively easy to produce a home appliance that can use two-way communications to interact with energy management systems. Because they can manage discrete device components to reduce energy consumption at a moment in time, smart appliances connected to the grid offer extensive load management options.
Yet the market is still grappling with business model issues, questions of user privacy and control, technology standards development, and consumer acceptance
“Smart appliances are at the very beginning of their commercialization path,” said Pike’s Research Director Bob Gohn. “While technology standards have been slow to develop, the pace is now picking up and appliance manufacturers are readying themselves to launch products in increasingly greater numbers.”
Gohn adds that there are four key drivers behind realizing widespread smart appliance adoption:
Dynamic pricing – A necessary element to elicit changes in the way consumers use energy. Utilities and regulators will determine how prevalent these tariffs will be.
Standards – Communications standards must be defined to handle messaging between appliances, the grid, and any other parties involved in managing energy. Industry groups, manufacturers, and governments are working to gain consensus quickly.
Control and privacy – Consumers demand final control over their devices and want their data to be managed in confidence. Vendors will have to prove that they can manage data successfully.
Education – There is a lack of understanding among the stakeholder groups as to what smart appliances and the smart grid can do. Innovations and best practices need to be shared so that all participants are willing to play.
Pike Research’s (News - Alert) analysis indicates that the industry is close to resolving two of these issues: standards and control and privacy. Through continued testing efforts, the firm expects a few select standards to emerge that will be adopted by the industry. The San Ramon, California-based ZigBee non-profit standards association is likely to lead RF (radio-frequency) smart appliance implementations, while the Portland, Oregon-based industry group, HomePlug Powerline Alliance, is likely to be the forerunner in PLC ( power line carrier) initiatives. Once these standards are adopted on a wider scale, Pike predicts that manufacturers will begin to embed communications technologies in the majority of their product lines.
Pike Research’s report examines the current state of the global smart appliance market, including an analysis of market drivers and challenges, enabling technologies, regulatory factors, and key industry players. The study features detailed market forecasts of smart appliance unit shipments, revenues, and penetration rates, segmented by appliance product category and key world regions. An executive summary of the report is available for free download on the firm’s website.
Cheryl Kaften is an accomplished communicator who has written for consumer and corporate audiences. She has worked extensively for MasterCard (News - Alert) Worldwide, Philip Morris USA (Altria), and KPMG, and has consulted for Estee Lauder and the Philadelphia Inquirer Newspapers. To read more of her articles, please visit her columnist page.Edited by
Janice McDuffee
