According to the U.S. Department of Energy (DOE), the average energy use per home per year costs $2,000. With 110 million homes in the country, that’s a large sum of money. It is one reason why the relatively new home energy management (HEM) market is beginning to mature.

“Up until recently, the problem with the HEM market has been its segmentation,” said Rudy Scott, president of Energy Management Solutions LLC, Hillburn, N.Y.

To successfully manage residential energy use, the homeowner has had to understand utility rebate programs and find contractors to perform energy audits and make recommendations that will improve energy consumption.

Another problem with the HEM market is that, once the homeowner gets beyond the first few main electrical consumer appliances, the return on investment drops dramatically, according to Brad Paine, director of product marketing at Honeywell, Morristown, N.J.

“Ultimately, the HEM market will be driven by modular solutions that allow the homeowner to control a couple of devices, while also getting insight into the home’s consumption, which could encourage changed behaviors to save energy,” he said.

Principal drivers
The main drivers pushing the development of the HEM market, which basically means having a connected, energy--efficient home, are rising electrical costs and a desire to determine how to be more energy-efficient.

“Aggregating the information from the electric bill into the various energy loads, such as HVAC, appliances, lighting, etc., enables the homeowner to decide what loads they can curtail or eliminate,” said Don Millstein, president of E-Mon Corp., Langhorne, Pa.

While residential customers are concerned with increasing electric rates, particularly with many deregulation rate caps expiring, they have been inundated with opportunities to save on their energy bill with programs, such as buying power from alternate suppliers; purchasing green power, solar panels and utility rebates; and demand response programs.

“This customer base is not sure how to react and determine the best solutions. In many cases, they decide to do nothing or determine it is not worth the effort for the relatively small financial impact,” Millstein said.

In addition to local state and utility programs, the new federal tax credit in the Cut Energy Bills at Home Act: 25E Residential Performance Tax Credit will provide the first performance-based tax credit to encourage people to make whole-house energy improvements. A contractor establishes the baseline energy use of the home using accepted standards and then provides estimated energy savings by modeling the proposed retrofit using software certified by the Residential Energy Services Network for use with such programs as the Environmental Protection Agency’s Energy Star and the DOE’s Building America Program.

“Municipalities are also using city tax credits to promote conservation,” Scott said.

According to John Steinberg, co-founder of EcoFactor, Redwood City, Calif., utilities have a role in the HEM market but are not necessarily the primary driver.

“One of the indicators of the rapid maturation of the HEM market is that many of the participants are not utilities, such as broadband providers, HVAC designers and contractors, and intelligent appliance providers, who tend to be more attuned to the preferences and satisfaction of the consumer,” he said.

HEM technology
“If you examine a typical home’s energy use, about half goes to HVAC,” said Roy Johnson, EcoFactor’s CEO. “One of the key enabling technologies is the wireless thermostat, which can communicate across the home network and even the Internet.”

Other conservation technologies include compact fluorescent lamps (CFLs) and light-emitting diodes (LEDs), which use 10–25 percent less energy than incandescent sources but produce equivalent light levels. Occupancy and motion sensors and inductive soft-start motors for appliances, pools or spas save 8–12 percent in energy bills. Solar and thermal systems for electric water heaters and/or heat and Energy Star-compliant appliances also will help conserve energy.

Electrical contractors can use their energy-efficiency expertise to create a sales plan that provides homeowners with a single-source solution, reduces residential energy consumption, and helps the HEM market grow and mature, Scott said.

“Contractors can team up with local home performance and weatherization companies to make inroads into the HEM market,” he said.

Johnson predicts that growth in the HEM market will be relatively slow over the next couple of years, but in the long run, it will become commonplace.

“There’s enough momentum now in the market to say that energy and financial concerns will help significantly drive its growth and that HEM should become widespread over the next decade, providing great opportunities to contractors that are willing to invest in the necessary high-tech, low-voltage, energy management technology,” he said.


BREMER, a freelance writer based in Solomons, Md., contributes frequently to ELECTRICAL CONTRACTOR. She can be reached at 410.394.6966 and darbremer@comcast.net.