The Curious Cult of the Connected Thermostat

Last month, Nest Labs managed to haul in a further $80 million of VC funding for their Internet-connected smart thermostat.  That’s good news for Nest, but makes one wonder what the investors are hoping to get back?  There is no questioning its success in the US.  Nest claim to be shipping about 40,000 thermostats every month.  That equates to around 5% of the 10 million a year US market, which has historically been dominated by Emerson, Honeywell, Johnson and Lux.  But how much of the other 95% can they win?

A basic programmable thermostat in the US costs under $20, not the $250 price tag of the Nest.  As such, Nest appeals to those who like buying technology and form rather than function – it’s no surprise that it sells as an accessory in Apple Stores in the US.  It has all of the glamour and pizzazz of Apple products, but with a worrying limitation – it is just hardware – there’s no service model.  In other words, it’s a bit like an iPhone without an App Store.

There is no doubt that it’s a lot easier to use than most conventional thermostats, which seem to be exclusively designed by engineers who failed their user experience courses and want to get their own back on society.  However, there are plenty of alternatives which are cheaper, just as easy to use and which work outside the US.  And there have been for the last few decades.  But these alternatives have historically failed to sell.  That’s changed, but this new generation of connected wireless thermostats has an Achilles’ heel – they need someone to support the web service for their life, which may be ten to twenty years, and I can’t see where that’s been factored in.  So is Nest going to feather the pockets of its VC backers, or make an omelette out of their investments?

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Fifty Shades of Tariff

There’s nothing that better illustrates the sado-masochistic relationship between energy suppliers and their customers than Tariffs.  They’ve evolved to be the whip that utilities deploy to beat their users into “correcting” their behaviour.  That form of correction may be trying to limit the total amount of energy you use, or changing when you use it.  But there’s a clear message coming through – energy suppliers want to be in control of the relationship. 

It’s a concept that consumers have a problem with.  Survey after survey reports the message that consumers don’t understand tariffs.  They don’t even understand the word.  And regulators are often less than happy with multiple or complex tariffs, because they’re aware how much they confuse people.  That was highlighted in the UK earlier this year when the regulator OFGEM took the paddle to the utilities to persuade them to reduce the hundreds of tariffs in the UK to a few simple ones.  But that doesn’t stop utilities fantasising about a future where they can run riot with tariffs.  The most extreme example is now being constructed in the UK as part of the British smart metering specifications.  These allow a level of complexity that makes the most diabolic tortures devised by the Inquisition look simple.  Fighting the consumer interest corner is our Energy regulator – OFGEM, which is about to give up on persuasion and start meting out some punishment itself.

There are some valid reasons for considering complex tariffs, but these need to include consumer engagement as a fundamental feature of their development.  What is happening instead, particularly in theUK, is that tariffing structures are being developed as a technical exercise.  They are now so complex that they threaten the interoperability, cost and usability of the British smart metering roll-out, setting smart metering up to be the next major UK Government IT disaster. 

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The Smart Gasman Cometh – a Smart Metering Song

It’s almost exactly fifty years since Flanders and Swann wrote their classic comic song “The Gasman Cometh”.  With the advent of smart metering it seemed an appropriate time to update it, and give all those involved in smart metering something to sing at their Christmas parties.  I’d also recommend singing it whilst reading DECC’s First Annual Progress Report on the Roll-out of Smart Meters.  It has the advantage of being considerably shorter.

Twas on a Monday morning,
The gasman came to call.
My meter wouldn’t work,
It wasn’t being smart at all.
He put another meter in,
It took him several hours.
But it couldn’t send a reading, as the comms hub wasn’t powered!

Oh, it all makes work,
For the working man to do!

 

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Smart Meters could have saved US from Sandy

Following the disruption caused by hurricane Sandy, Smart Metering proponents have been quick to point out how a more widespread deployment could have prevented many of the problems seen in New York and New Jersey.  Utilities in Texas and California reported that within their regions where there was close to 100% smart meter deployment, they’d not experienced a single example of power outage or flooding.  And smart meter manufacturers added that the outage reporting capability of their meters would have saved vast amounts of time and money for the East Coast utilities.  “Instead of having hundreds of staff watching CNN and following twitter feeds to find out where power had gone down, utility executives could have just checked on their iPhones” said one industry spokesman.

These benefits were echoed by smart thermostat manufacturers, claiming that the wireless networks in their devices could have been reconfigured to provide a local wireless mesh, enabling peer-to-peer communications within affected communities, as well as being used for in-home geo-location, aiding local emergency services.  “Our thermostats don’t just look over your climate control”, one executive commented, “they can even look after Granny and your pets in situations like this”.

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Posh Boys push Smart Meters

DECC – the Government department leading the Smart Metering deployment in the UK recently published their latest research on consumer attitudes to Smart Metering.  It reports the results of in depth interviews with 120 representative members of the population on their feelings about Smart Meters and IHDs.

The research was conducted in February this year, several months before the Conservative backbencher Nadine Dorries described her Prime Minister David Cameron and Chancellor of the Exchequer George Osborne as “two posh boys who don’t know the price of a pint of milk”.  She wasn’t referring to the UK Smart Metering programme, but it was a pretty good description of what these 120 respondents thought of the smart meter deployment, telling researchers that it “sounds like it’s from someone who doesn’t have trouble paying their bills”.

The report is not all bad news.  The respondents included people who had received In Home Energy Displays and in general they liked them.  They thought they provided real benefits.  In contrast, they had difficulty in seeing what the added value of the smart meter was.

I suspect DECC is busy trying to massage the results to make it look as if the survey supported smart metering, helped by some rather ambiguous leading questions.  But the content highlights a growing division within the smart metering programme, which is whether it is meant to be there for the benefit of consumers or for the benefit of utilities?

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